COMMISSION - Duke's Fuqua School of Businessmarx/bio/AntitrustDecisions/Food... · L 75/4 EN Official Journal of the European Union 12.3.2004 (10) Its European affiliates are Ajinomoto

12.3.2004 EN L 75/1Official Journal of the European Union

II

(Acts whose publication is not obligatory)

COMMISSION

COMMISSION DECISION

of 17 December 2002

relating to a proceeding pursuant to Article 81 of the EC Treaty and Article 53 of the EEAAgreement

(Case COMP/C.37.671 — Flood flavour enhancers)

(notified under document number (2002) 5091)

(Only the English text is authentic)

(Text with EEA relevance)

(2004/206/EC)

L 75/2 EN 12.3.2004Official Journal of the European Union

CONTENTS

Page

PART I — FACTS

A. Summary of the infringement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

B. The nucleotide industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

1. The product . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

2. The producers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

3. The market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

C. Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

D. Description of events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

1. Participants and organisation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

2. The essential features of the cartel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

3. Initial contacts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

4. Operation of the cartel agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

PART II — LEGAL ASSESSMENT

A. Jurisdiction (application of the Treaty and the EEA Agreement) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

1. Relationship between the Treaty and the EEA Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

B. Application of Article 81 of the Treaty and Article 53 of the EEA Agreement . . . . . . . . . . . . . . . . . . . . . 17

1. Article 81(1) of the Treaty and Article 53(1) of the EEA Agreement. . . . . . . . . . . . . . . . . . . . . . . . . 17

2. Agreements and concerted practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

3. Single continuous infringement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

4. Restriction of competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

5. Effect upon trade between Member States and between EEA contracting parties . . . . . . . . . . . . . . 19

6. Provisions of competition rules applicable to Austria, Finland, Iceland, Liechtenstein, Norwayand Sweden . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

C. Addressees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

1. Principles applicable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

2. Addressees of the Decision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

D. Duration of the infringement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

E. Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

1. Article 3 of Regulation No 17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

2. Article 15(2) of Regulation No 17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23


THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Com-munity,

Having regard to the Agreement on the European EconomicArea,

Having regard to Council Regulation No 17 of 6 February1962, First Regulation implementing Articles 85 and 86 ofthe Treaty (1), as last amended by Regulation (EC) No 1/2003 (2), and in particular Articles 3 and 15 thereof,

Having regard to the Commission decision of 10 July 2002 toopen a proceeding in this case,

Having given the undertakings concerned the opportunity tomake known their views on the objections raised by theCommission pursuant to Article 19(1) of Regulation No 17and Commission Regulation (EC) No 2842/98 of 22 December1998 on the hearing of parties in certain proceedings underArticles 85 and 86 of the EC Treaty (3),

After consulting the Advisory Committee on Restrictive Prac-tices and Dominant Positions,

Having regard to the report of the Hearing Officer in thiscase (4),

Whereas:

PART I — FACTS

A. SUMMARY OF THE INFRINGEMENT

(1) This Decision is addressed to the following undertakings:

— Ajinomoto Company Incorporated

— Takeda Chemical Industries Limited

— Daesang Corporation

— Cheil Jedang Corporation

(2) The infringement consists in the participation of thoseproducers of nucleotides in a continuing agreementcontrary to Article 81(1) of the Treaty and Article 53(1)of the EEA Agreement covering the Community and theEEA, by which they fixed the prices of the product,implemented price increases, allocated customers andset up a scheme to monitor and enforce their agreements.

(1) OJ 13, 21.2.1962, p. 204/62.(2) OJ L 1, 4.1.2003, p. 1.(3) OJ L 354, 30.12.1998, p. 18.(4) OJ C 64, 12.3.2004.

(3) The undertakings participated in the infringementbetween November 1988 and June 1998 (5).

B. THE NUCLEOTIDE INDUSTRY

1. THE PRODUCT

(4) Nucleic acid or nucleotide is made from glucose througha process of fermentation, separation, crystallisation andfiltration.

(5) There are two nucleotides, which are used for foodflavour enhancement, namely disodium 5'-inosinate(IMP) and disodium 5'-guanylate (GMP). Both nucleotid-es are also sold in mixtures of these two products, suchas I & G, a 50/50 mixture of the two nucleotides.

(6) IMP was the first nucleotide to be discovered with theability to sharpen flavours in some foods. It was laterdiscovered that GMP had the same properties. Bothproducts are only used in small quantities. They functionas a food flavour enhancer only in the presence of aglutamate, whether added, like monosodium glutamate(MSG), or naturally occurring, like the glutamate con-tained in tomatoes. Among other applications IMPand GMP are effective in low-sodium formulations.Nucleotide flavour enhancers are used by major foodmanufacturers to add flavour to foods either on theirown (with naturally occurring glutamate) or, most often,in combination with MSG.

(7) As such, they are mainly used to replace beef extracts,to enhance sweet and meaty flavours, to mask ‘off’flavours in various food formulations and to overcomebitterness.

2. THE PRODUCERS

(a) AJINOMOTO COMPANY, INC. (JAPAN)

(8) Ajinomoto Company, Inc. (Ajinomoto) is the ultimateparent company of a group of companies manufacturingchemicals, including nucleotides and food products.Backed by capabilities in amino acid technology, thegroup of companies is also engaged in the developmentand manufacture of pharmaceuticals. Ajinomoto’s oper-ations encompass manufacturing and marketing basesin 21 countries.

(9) Ajinomoto operates nucleotide production plants inJapan.

(5) See under the heading ‘Duration’ for individualised dates perundertaking.


(10) Its European affiliates are Ajinomoto Europe SalesGmbH (Hamburg, Germany), Ajinomoto Eurolysine(Paris, France), OmniChem (Louvain-la-neuve, Belgium)and Forum Holdings Ltd (United Kingdom).

(11) In 2001, all companies belonging to the Ajinomotogroup had a total worldwide turnover ofEUR 8 680 million.

(b) TAKEDA CHEMICAL INDUSTRIES LIMITED (JAPAN)

(12) Takeda Chemical Industries Ltd (Takeda) is the ultimateparent company of a group of companies manufacturingpharmaceuticals, chemicals, bulk vitamins, plant protec-tion products and food additives such as nucleotides.

(13) The distribution of nucleotides into the EEA markets isorganised through Mitsui & Co. (Japan). There arehowever several local sales subsidiaries in Europe: Mitsui& Co. Deutschland GmbH (for sales to western Europe(including Germany, the Netherlands, Portugal andSwitzerland), northern Europe, eastern Europe and Tur-key), Mitsui & Co. UK Plc (for sales in the UnitedKingdom and Ireland) and Mitsui & Co. France SA (forsales in France).

(14) For the financial year running from 1 April 2001 to31 March 2002, Takeda had a total worldwide turnoverof EUR 9 247 million (6).

(c) DAESANG CORPORATION (SOUTH KOREA)

(15) Daesang Corporation (Daesang) is the ultimate parentcompany of a group operating worldwide, the activitiesof which include the manufacture of seasonings, animalfeeds and amino acids. It was created in November 1997through a merger of Daesang Industrial Limited andMiwon Corporation Limited. Daesang Industrial Limitedwas formerly known as Sewon Corporation Limitedand Miwon Foods Corporation Limited (‘Daesang’ or‘Miwon’).

(16) Since September 1994, Daesang Europe BV is DaesangCorporation’s European sales company for nucleotides.Daesang Europe mainly sells nucleotides to independentdistributors in the EEA.

(17) Daesang’s worldwide turnover in 2001 wasEUR 1 382 million (7).

(6) The following exchange rate was used: EUR 1 = 108,682 JPY(Eurostat’s reference database — 2001 exchange rate).

(7) EUR 1 = 1 154,83 won (Eurostat’s reference database 2001exchange rate).

(d) CHEIL JEDANG CORPORATION (SOUTH KOREA)

(18) Cheil Jedang Corporation (Cheil) is the ultimate parentcompany of a group of companies established andoperating worldwide. It was established as the SouthKorean Samsung Group’s first manufacturing affiliateback in 1953. In 1993, Cheil Jedang Corporationbecame independent. Cheil is a diversified companyfocusing among other things on pharmaceuticals andfoodstuffs. Cheil entered the nucleotide market in 1977.

(19) Cheil operates in the EEA through its wholly ownedsubsidiary, CJ Europe GmbH, and various independentdistributors.

(20) In 2001, the companies belonging to the Cheil grouphad a total turnover of EUR 1 976 million (8).

3. THE MARKET

(a) SUPPLY SIDE

1. Production

(21) The main four producers of nucleotides are Ajinomoto,Takeda, Cheil and Daesang. At the time of the infringe-ment, other producers were Kyowa Hakko Kogyo Co. Ltd(Kyowa) (Japan) (9) and Yamasa Corporation (Yamasa)(Japan) (10).

(22) The total worldwide nucleotide production capacity in1997 was approximately 10 700 metric tonnes. In1992, the total worldwide nucleotide productioncapacity was around 6 660 metric tonnes.

(23) None of the Japanese or Korean manufacturers ofnucleotides have production facilities in the Community.Cheil has a production plant in Indonesia and Kyowahas recently constructed a production plant in the USA.

2. Distribution

(24) The abovementioned Japanese and South Korean pro-ducers of nucleotides sell the product on the EEA marketthrough sales subsidiaries and independent distributorsestablished in different Member States.

(25) Since September 1994, Daesang sells nucleotides inEurope through its wholly owned subsidiary DaesangEurope BV. Daesang Europe BV imports nucleotidesfrom Asia and sells them mainly to independent distribu-tors in the EEA.

(8) EUR 1 = 1,13404 USD (Eurostat’s reference database 2001exchange rate).

(9) In 1992 Kyowa ceased exporting nucleotides to Europe.(10) Yamasa Corporation ceased supplying food flavour enhancer to

Europe in 1994.


(26) Ajinomoto sells nucleotides in the EEA through its salessubsidiary Ajinomoto Europe Sales GmbH establishedin Hamburg, Germany, as well as through independentdistributors.

(27) Cheil sells nucleotides in the EEA through its whollyowned subsidiary, CJ Europe GmbH, and through inde-pendent distributors.

(28) Takeda sells nucleotides on the EEA through an indepen-dent distributor, which distributes the product to cus-tomers through its subsidiaries established in Germany,France and the United Kingdom.

(b) DEMAND SIDE

(29) The demand for nucleotides is directly linked to the foodindustry. As mentioned before, nucleotides are mainlyused by major food manufacturers to add flavour tofoods.

(30) Between 1992 and 1999, the nucleotides market grewrapidly: whereas worldwide consumption in 1992 wasstill at approximately 4 465 metric tonnes, it was wellover 9 000 metric tonnes in 1999. Over the sameperiod, it is estimated that the Community consumptionof nucleotides has risen from approximately 200 metrictonnes to over 500 metric tonnes in 1999.

(31) According to the Commission’s best estimates, the totalEEA market was worth in the region of EUR 12 millionin 1997. In 2000, the EEA market for nucleotides wasworth around EUR 7,5 million.

(32) It is estimated that the three main customers in Europe,[ ]* (*), [ ]* (including [ ]*, which was acquired by [ ]*during the 1990s) and [ ]* represent between 45 % and55 % each year of all nucleotides sold in Europe. On anindividual basis, [ ]* purchases approximately 20 % and[ ]* 15 % of all nucleotides imported into Europe.

(c) MARKET INFORMATION

(33) The nucleotides business is essentially a global one. Themajor producers of nucleotides are large, multinationalcorporations established in Japan and South Korea.Although production is essentially based in Asia, salesare global (essentially to three major geographical areas— North America, Europe and Asia). The relevantgeographic market for nucleotides should therefore bedescribed as worldwide.

(*) The square brackets marked with an asterisk denote confidentialinformation which has been deleted from the text.

(34) All nucleotides sold in the EEA are imported fromoutside the EEA.

(35) South Korean producers benefited from a Communitypreferential custom tariff regime until 30 April 1998 (11).

(36) The strain on which the production of commercialnucleotides is essentially based (as well as the productionprocess itself) has been patented. Among other factorsthat may influence the customer’s choice of supplier,parties have mentioned the quality of the product, price,delivery and technical support.

(37) From the beginning of 1988 until the end of 1997, theaverage monthly nucleotide prices in the EEA remainedfairly stable (approximately between EUR 22 and EUR 27per kilogram). After this period, nucleotides pricesstarted to fall considerably (prices estimated approxi-mately between EUR 12 and EUR 16 in 1999 andbetween EUR 8 and EUR 12 in 2000).

(d) INTER-STATE TRADE

(38) Over the period considered in this Decision, the nucleo-tides market was characterised by important flowsbetween the current Member States as well as betweenthe Contracting Parties to the EEA Agreement.

(39) All undertakings marketed the product in almost everyMember State, either through sales subsidiaries orthrough distributors established in the Community.

(40) Daesang, for instance, sells nucleotides in the whole ofthe Community through Daesang Europe BV, establishedin the Netherlands. Cheil and Ajinomoto operate in asimilar way. Takeda, on the other hand, markets itsnucleotides through an independent distributor who hassales subsidiaries in Germany, the United Kingdom andFrance. The German outlet is responsible for virtually allof the Community territory with the exception ofFrance, the United Kingdom and Ireland, where othersubsidiaries are established.

(11) 1.1.1989 to 31.12.1989: 0 % (GSP) Council Regulation (EEC)No 4257/88 of 19 December 1988 applying generalised tariffpreferences for 1989 in respect of certain industrial productsoriginating in developing countries (OJ L 375, 31.12.1988, p. 1.);1.1.1990 to 31.12.1990: 0 % (GSP) Council Regulation (EEC)No 3896/89 of 18 December 1989 applying generalised tariffpreferences for 1990 in respect of certain industrial productsoriginating in developing countries (OJ L 383, 30.12.1989, p. 1);1.1.1991 to 31.12.1994: 0 % (GSP) Council Regulation (EEC)No 3831/90 of 20 December 1990 applying generalised tariffpreferences for 1991 in respect of certain industrial productsoriginating in developing countries (OJ L 370, 31.12.1990, p. 1);1.1.1995 to 30.4.1998: 0 % (GSP) Council Regulation (EC)No 3281/1994 of 19 December 1994 applying a four-yearscheme of generalised tariff preferences (1995 to 1998) in respectof certain industrial products originating in developing countries(OJ L 348, 31.12.1994, p. 1).


(41) Accordingly, a significant part of the nucleotide sales inthe Community represented inter-State trade.

(42) During the period of the infringement and since thecreation of the EEA, there were also sales to nucleotideusers established in the EEA, mainly through the salessubsidiaries and distributors already established in theCommunity.

C. PROCEDURE

(a) COMMISSION PROCEEDINGS

(43) On 9 September 1999, the Japanese company Takedafiled an application pursuant to the Commission Noticeon the non-imposition or reduction of fines in cartelcases (12) (the Leniency Notice) by informing the Com-mission of a cartel existing with regard to nucleotides,expressing its intention to cooperate fully with theCommission. On 14 September 1999, Takeda handed afile to the Commission containing certain documentsrelating to the case.

(44) On 1 February 2000, Daesang approached the Com-mission, confirming the existence of a cartel with regardto nucleotides and expressing its intention to cooperatefully with the Commission’s investigation.

(45) On 21 February 2000, the Commission addressedrequests for information to Ajinomoto, Cheil, Daesangand Kyowa requiring detailed explanations concerningcontacts with competitors between 1992 and 1999.

(46) On the basis of the information received during 2000, itbecame clear that the cartel had operated prior to1992 and the Commission sent additional requests forinformation on 11 June 2001 to Takeda, Ajinomoto,Daesang and Cheil concerning the period between1988 and 1992.

(47) In its response to the Commission’s first request forinformation (dated 3 April 2000 and 21 April 2000),Daesang admitted participating in meetings with com-petitors and provided the Commission with certaindocuments specifying the purpose, dates and partici-pants of various meetings. Daesang submitted a sup-plementary submission on 10 May 2001.

(48) Ajinomoto responded to the Commission’s request forinformation on 3 April 2000 and 5 May 2000 handingover certain documents relating to the meetings andexpressing its intention to extend its full cooperation inthe Commission’s proceedings. In its reply to theCommission’s request for information, which was

(12) OJ C 207, 18.7.1996, p. 4.

received on 17 April 2000, Cheil admitted participatingin meetings between competitors and provided theCommission with more details and documents relatingto these meetings. Cheil also expressed its intention tofully cooperate with the investigation. Kyowa submitteda statement in response to the Commission’s request forinformation on 4 May 2000, admitting its participationin meetings between competitors until the end of 1993,and equally expressing its intention to cooperate fullywith the investigation. Kyowa also demonstrated that ithad ceased supplying nucleotides used as food flavourenhancers in Europe since 1992.

(49) On 20 October 2000, Takeda issued to the Commissiona corporate statement relating to certain anti-competitiveactivities involving Takeda in the Community, comp-lementing the documents submitted on 14 September1999. In its corporate statement, Takeda submitteddetailed information on the cartel, its structure, basicrules and the meetings between competitors.

(50) As stated, the Commission issued a second request forinformation concerning the period 1988 to 1992 on11 June 2001. In its response of 20 July 2001, Takedaprovided additional information with regard to theoperation of the cartel before 1992.

(51) Ajinomoto, on the other hand, submitted in its reply of30 July 2001 that it was unable to find any referencesto meetings with nucleotide competitors during theperiod 1988 to 1991. However, it admitted that fromtime to time such meetings must have taken place.

(52) Daesang replied on 23 July 2001 and confirmed itsparticipation in the cartel as from October 1988.

(53) Cheil submitted its reply on 14 August 2001, statingthat it believed that the meetings between 1988 and1991 did not discuss the European market.

(54) On 24 October 2001 and 20 December 2001, theCommission addressed a request for information toYamasa. In its response of 17 January 2002, Yamasademonstrated that it had ceased supplying nucleotidesused as food flavour enhancers in Europe sinceJuly 1994.

(55) On 24 October 2001 and 31 January 2002, representa-tives of Ajinomoto met with the Commission to discusstheir cooperation and submitted additional memorandaon 17 December 2001 and 31 January 2002.

(56) On 10 July 2002, the Commission issued a statement ofobjections addressed to Ajinomoto, Takeda, Daesangand Cheil.


D. DESCRIPTION OF EVENTS

1. PARTICIPANTS AND ORGANISATION

(57) The meetings were generally held at top level (generalmanager and manager level), as is demonstrated by theevidence in the file concerning the dates, locations andattendance for most of the cartel meetings (13).

(58) Kyowa Yamasa withdrew from selling outside Japanrespectively in 1992 and 1994, leaving only Ajinomoto,Takeda, Cheil and Daesang as players on the worldwidemarkets (outside Japan). Consequently, and as shown bythe evidence in the Commission’s file, the meetingswould be restricted to Takeda, Ajinomoto, Cheil andDaesang as from October 1994 (14).

(59) The participants would usually meet in the last half ofAugust/September, prior to the annual quotations thatwere to be sent to the three (initially four) big Europeancommercial users of nucleotides, [ ]*, [ ]*, [ ]* (and [ ]*,which was acquired by [ ]* during the 1990s). Theseprices would then be used as a benchmark for determin-ing the prices for sales to other customers (15) and toallocate these customers between them.

(60) Usually between the following January and March, themanufacturers would then hold a meeting to review theresults of the annual contract negotiations with the bigthree customers and discuss prices generally applicableon the market (16).

(61) The participants would also hold bilateral meetingsduring which they would prepare the multilateral meet-ings or review the implementation of the agreements,such as in relation to specific customers.

2. THE ESSENTIAL FEATURES OF THE CARTEL

BASIC PRINCIPLES

(62) The structure, organisation and operation of the cartelwas based upon a shared assessment of the market. Asmentioned above, the producers recognised that inEurope, the market was largely made up by three largeindustrial users of nucleotides: [ ]*, [ ]* (who acquired[ ]* during the 1990s) and [ ]*. Between them, theypurchased around 45 to 55 % of all nucleotides sold inEurope each year.

(13) See pages 1931 to 1947 and 1961 to 1974 of the Commission’sfile; see also pages 316 to 319, 1995 and 2174 to 2175 of theCommission’s file.

(14) See pages 2170 to 2171 of the Commission’s file.(15) Ajinomoto refers to these other customers (other than [ ]*, [ ]*

and [ ]*) as ‘the general market’.(16) See pages 2170 to 2171 of the Commission’s file.

(63) The purpose of the cartel meetings was to discuss thegeneral trends on the nucleotides market, to shareinformation on prices and to discuss allocation betweenthe manufacturers of the annual nucleotides sales con-tracts concluded with the three large industrial users ofnucleotides in the Community. The meetings includeddiscussions to the effect that the prices at whichnucleotides were sold to these three companies were tobe used as the benchmark for determining the prices forsales to other customers (17).

(64) As part of the agreement, the Japanese producerswould purchase product from the Korean producers inexchange for which the Korean producers agreed tolimit their sales to certain markets as well as to certaincustomers (‘counterpurchasing agreements’). In fact,Takeda would be in charge of the counterpurchasesfrom Cheil, whilst Ajinomoto would have similararrangements with Daesang (18).

(65) The basic principles of the cartel are very clearlyexplained in Takeda’s minutes of a meeting held on25 July 1997 between Takeda and Ajinomoto (19), whereAjinomoto’s new [...] was introduced. In Takeda’s ownwords, it was explained to him that the regular meetingsbetween competitors aimed at ‘(a) maintaining andreforming international market prices, (b) respectingeach other’s markets and (c) allocating large clients inEurope’.

(a) Price fixing

(66) The cartel members agreed on ‘minimum’ and ‘target’prices to be implemented. Prices would be set for thesale of nucleotides to the big three European customersand these prices would then be used as a benchmark fordetermining the sales to other customers. Every year, atarget price for the next year in relation to the big threecustomers would also be discussed (20) (see, for instance,recitals 80, 87, 92, 94, 98, 108, 112, 113, 118 to 120,124, 127 to 129, 139 to 141).

(67) Prices were mainly established both in USD and DEM.In the European market the DEM would be usually usedas the benchmark currency and converted into theappropriate national currency when quoting and charg-ing prices to the national customers.

(17) See Takeda’s corporate statement, page 2170 of the Com-mission’s file.

(18) See pages 303 and 1962 of the Commission’s file.(19) See pages 2158 to 2161 of the Commission’s file.(20) See Takeda’s corporate statement, pages 2170 to 2171 of the

Commission’s file; see also Daesang’s statement, page 1933of the Commission’s file; see also Daesang’s supplementarysubmission, page 1963 of the Commission’s file; see also Kyowa’sstatement, pages 870 and 871 of the Commission’s file; see alsoCheil’s statement, page 304 of the Commission’s file; see alsoAjinomoto’s memorandum, page 2, paragraph 3, page 2445 ofthe Commission’s file.


(b) Customer allocation (and market sharing)

(68) [ ]* and [ ]* were historically supplied by Takedawhereas [ ]* was historically supplied by Ajinomoto (21).According to Daesang, an agreement existed betweenTakeda and Ajinomoto not to sell to each other’srespective European customers (22).

(69) In order to protect their sales to these major Europeannucleotides users, Takeda and Ajinomoto also enteredinto agreements with their main competitors wherebyTakeda and Ajinomoto purchased product from theircompetitors in exchange for which the respective com-petitors would limit their sales to the main Europeannucleotides users (23). As Cheil puts it (24), ‘The Japanesecompanies (Takeda and Ajinomoto) were to buy nucleo-tides from Cheil and Miwon (Daesang) respectively. Inexchange, the Korean producers were supposed not tosell to the European “big three” and were to restrictquantity to Japan’. (see, for instance, recitals 78, 81, 84,86, 100 to 102, 108, 111, 112, 114, 116, 117, 122,123).

(70) This compensation scheme, which was a corollary to thecustomer allocation scheme, also lead to the allocation ofmarkets on a worldwide basis, as confirmed by Cheil (25).In exchange for not selling to certain customers, theJapanese undertakings purchased product from theirKorean counterparts (26). Given that these customerswere situated in different markets from where thecompensation sales occured, this effectively lead to theallocation of markets (see, for instance, recitals 81, 82,85, 94, 95, 100 to 102, 110, 112, 122, 124, 134).

(71) Takeda confirms that an integral part of the cartelarrangements concerned ‘the allocation between themanufacturers of the annual nucleotides sales contractsconcluded with the three large commercial users ofnucleotides in the Community: namely [ ]*, [ ]* and [ ]*’.


(22) See Daesang’s supplementary submission, page 4, or page 1963of the Commission’s file.

(23) See Cheil’s statement, page 2, paragraph 2 (page 301 of theCommission’s file); Kyowa, page 5, paragraph 1 (page 870 ofthe Commission’s file); Daesang’s supplementary statement,pages 1963 and 1964.

(24) Page 5 of Cheil’s statement, page 304 of the Commission’s file.(25) See Cheil’s statement, page 4, page 303 of the Commission’s file.(26) See Cheil’s statement, page 5 (page 304 of the Commission’s

file); see also pages 1963 to 1964 of the Commission’s file.

IMPLEMENTATION

(72) The holding of regular and frequent meetings betweenthe addressees of this Decision was a key feature of thecartel’s organisation. From 1989 to 1998, more than 20multilateral meetings (including all cartel members) havebeen identified. In addition, the parties held regularbilateral meetings during this period (more than 35 ofsuch contacts have been identified). These meetings werefor example used to prepare the respective positions ofthe undertakings in the multilateral meetings. There werealso occasional contacts by telephone (approximately 10telephone conversations have been identified).

(73) The timing of the cartel meetings was usually set shortlyprior to the annual contract negotiations with the three‘big European customers’ in order to agree on the targetprices to be quoted as well as on the allocation of thosecontracts (27). The parties also held meetings to reviewthe implementation of the target prices during the salesnegotiations (28), although the review of past targetprices as well as the discussions on new target prices tobe applied were often combined in one and the samemeeting (see, for instance, recitals 93, 94, 96, 103, 109,118, 125, 126, 130, 131, 141).

(74) The participants also exchanged their sales prices andvolumes, which were used as a basis in their discussionsto determine the target prices to be fixed (29) (see, forinstance, recitals 80, 96, 98, 103, 115, 133).

3. INITIAL CONTACTS

(75) Cheil admits that certain meetings took place betweencompetitors as from July 1988, although it first statedthat the meetings between 1988 and 1991 did notappear to pertain to the EEA, focusing on the Japaneseand Asian markets instead (30).

(76) A business trip report submitted by Cheil dated 16 to28 July 1988 and attached as Annex 5 to Cheil’s 2001statement, mentions that ‘Takeda said they were makingP-meeting (31) for nucleotides to avert severe competitionwhich would be occurred by Miwon’s [Daesang] entryand asked us to support and join into the P-meeting’.

(27) See Takeda’s corporate statement, pages 2170 and 2171 of theCommission’s file.



(30) See pages 1181 to 1182 of the Commission’s file.(31) Referring to the meetings between producers or price-fixing

meetings.


(77) Takeda, for its part, situates the initiation of the meetingsbetween competitors around 1989 (32).

(78) Kyowa, on the other hand, has submitted that themeetings between Japanese nucleotides producers start-ed at least in 1986, but ‘[...] there may have been evenearlier meetings’ (33). Kyowa further submits that in itsview, ‘the main players behind the meetings were Takedaand Ajinomoto. Takeda was in charge of dealing withCheil, and Ajinomoto was in charge of dealing with[Daesang]. Takeda was also the coordinator of thegroup.’ (34).

(79) Ajinomoto admits that representatives of Ajinomoto didfrom time to time meet with Cheil, Takeda, Kyowa andYamasa from 1988 onwards. Whereas it first claimedthat it had not been able to collect any information onthe subject matter of these meetings for the period1988 to 1991 (35), it subsequently submitted variousinternal documents on contacts during that period in itsadditional memorandum of 17 December 2001 (36).

(80) An internal memorandum submitted by Ajinomotoshows that representatives of the Japanese nucleotidesproducers (Takeda, Ajinomoto, Kyowa and Yamasa) heldmeetings on 8 and 10 November 1988 where, as regardsthe European market, they exchanged information on,and discussed and/or agreed upon the prices that wereoffered or to be offered by each company to the threebig end-users in Europe, i.e. [ ]*, [ ]* and [ ]* as well asthe target prices in the general market in Europe otherthan the ‘Big three customers’ for the 1989 calendaryear (37).

(81) Daesang submits (38) that it was first contacted by theJapanese producers shortly after it started to producenucleotides in 1987: a meeting was organised betweenthe Japanese producers (Daesang speaks of the ‘Associ-ation’ of Japanese producers), and representatives ofMiwon (now Daesang) in Tokyo on 5 October 1988.The purpose of this meeting was to limit Miwon’spenetration into the Japanese market and to discusspossible cooperation with the Korean producers. Thediscussions at this meeting led to the conclusion, on19 December 1988, of a ‘counterpurchasing agreement’between Ajinomoto and Miwon. Although presented asa ‘supply contract’, Daesang admits that the verballyagreed condition for this contract was that Miwon wasnot to increase its sales to Japan and not to obstruct theJapanese producers’ cooperation on world prices (39).

(32) See page 2170 of the Commission’s file.(33) See page 869 of the Commission’s file.(34) See page 869 of the Commission’s file.(35) See page 2030 of the Commission’s file.(36) See pages 2256 to 2299 of the Commission’s file.(37) See pages 2264 to 2269 of the Commission’s file.(38) Supplementary submission, see p. 2, point 1.(39) See page 1962 of the Commission’s file; see also pages 986 to

989 of the Commission’s file.

(82) This is corroborated by an internal fax of Miwon dated9 November 1988 where reference is made to thenegotiations for the supply contract with Ajinomoto,stating that ‘the contract contains a clause on theprohibition of new sales’. Daesang submits that thismeant that Ajinomoto was only willing to buy productfrom Miwon if Miwon did not increase its sales toJapan (40).

(83) In addition, Daesang submits that at this meetingon 5 October 1988, Ajinomoto made it clear thatcounterpurchases from Miwon would be made byAjinomoto whilst counterpurchases from Cheil wouldbe made by Takeda. Ajinomoto purchased Miwonproducts through Takeda’s distributor, which it used asa cover (41).

(84) In this respect, Daesang indicates that the initiative forthe agreement came from the Japanese producers (42),thus confirming Kyowa’s statements as mentioned above(‘the main players behind the meetings were Takeda andAjinomoto. [...] Takeda was also the coordinator of thegroup.’ (43)). The view that the cartel was lead by theJapanese producers is also shared by Cheil, stating that‘the broad commercial background to the events set outis one of dominant players seeking to protect an effectiveduopoly from emerging competition’ (44).

(85) Ajinomoto submits (45) in this respect that its role shouldbe considered as subordinate to Takeda’s which is saidto have initiated and orchestrated the cartel activities:‘Faced with the fact that it lacked a well-organised salesnetwork in the EEA [...] and the entry of additionalcompetition from Korean companies, it was Takeda thatwas keen to protect its leading position vis-à-vis [ ]* and[ ]* through customer allocation and price fixing.Meetings among the competitors were initiated by [aTakeda representative]*[...].[a Takeda representative]*chaired the meetings and made the opening and conclud-ing speeches. During the meetings, he would lead thediscussion and write grid-charts on a whiteboard. Takedawould complain vigorously whenever it came to itsattention that other companies had undercut the prede-termined price to [ ]* and [ ]*.’ (46)

(40) See pages 1962 and 990 to 992 of the Commission’s file.(41) Daesang’s supplementary statement, p. 3; see also Annexes K

and L attached thereto.(42) See pages 1961 to 1962 of the Commission’s file.(43) See page 4 of Kyowa’s statement; page 869 of the Commission’s

file.(44) See Cheil’s statement, page 2, paragraph 2; page 301 of the

Commission’s file.(45) See pages 2557 to 2558 in the Commission’s file.(46) This is contradicted by the facts in the Commission’s file. In an

internal note of Ajinomoto (see Annex 11 to Ajinomoto’sMemorandum of 30 June 2000 or pages 2496 to 2499 of theCommission’s file, it is stated that ‘we [Ajinomoto] as leadingmanufacturer as well as Takeda, have to take the lead in the priceincrease race, and therefore it is most likely to run against a headwind. However, it is inevitable that we have to take risks’;see also Annexes 7 and 8 to Ajinomoto’s memorandum,pages 2483 to 2488 of the Commission’s file).


(86) According to Daesang, another counterpurchasing con-tract was concluded between Takeda and Miwon in earlyMarch 1989. According to Daesang, this contract wasnegotiated on behalf of Miwon by Ajinomoto. TheCommission notes that, in its reply to the statement ofobjections, Ajinomoto contests that it negotiated acontract with Takeda on behalf of Miwon. The con-ditions of the contract with Takeda were that Miwon(now Daesang) was not to increase its sales to Japan, thatMiwon was to cooperate with the Japanese producers inraising the world price for nucleotides and that Miwonwas to cooperate with (i.e. refrain from selling to) the‘Big three’ customers ([ ]*, [ ]*, [ ]*).

4. OPERATION OF THE CARTEL AGREEMENT

(87) According to a business trip report (47), a meeting amongthe manufacturer(s) of nucleotides (in which Cheilparticipated) was held between 7 and 23 March 1989.The same business report indicates that attendantsagreed to meet again in Kyung Ju, Korea on 7 June 1989(according to Daesang, this is the meeting where thetarget prices for 1989 were agreed upon).

(88) An internal fax from Miwon Japan to Mitra (48) dated30 May 1989 (49), mentions, in addition to the supplyof product to Ajinomoto, an upcoming nucleotidemeeting with competitors on 6 and 7 June 1989in Kyung Ju, Korea, which was to be attended byrepresentatives of Takeda, Ajinomoto, Miwon as well asrepresentatives of two other producers.

(89) Daesang states that it believes that the target prices for1989 were set at this producers’ meeting of 6 and 7 June1989 (50).

(90) An internal fax of Ajinomoto dated 9 June 1989confirms this meeting, stating that ‘at a meeting whichtook place the day before yesterday in Korea, Takedatold the Koreans that a request was received by [...] toreduce the USD 27,50 cif price to the prevailing marketprice’ (51).

(91) An internal fax from Ajinomoto dated 13 July 1989indicates that Ajinomoto’s European sales office wasrequested to research and confirm their informationrelating to Takeda’s selling price of nucleotides to [ ]*and [ ]* and certain information on low selling price andsales quantities of Takeda and other manufacturers inWest-Germany, France, the United Kingdom, Switzer-land and Spain in preparation for an upcoming meetingbetween four Japanese and two Korean nucleotidesmanufacturers in Taiwan on 7 August 1989. No furtherinformation is available on whether or not this meetingof 7 August 1989 took place.

(47) See Annex 5 of Cheil’s 2001 statement, pages 2616 to 2619 ofthe Commission’s file.

(48) Miwon Trading and Shipping Company, a subsidiary of Miwon.(49) See pages 1963 to 1965 of the Commission’s file.(50) See page 1965 of the Commission’s file.(51) See pages 2259 and 2270 to 2272 of the Commission’s file

(page 3 and exhibit 2 of Ajinomoto’s supplementary statementof 17 December 2001).

(92) On 5 October 1989, representatives from Takeda,Ajinomoto, Cheil, Miwon and two other producers metin the ANA hotel in Tokyo in order to discuss prices forthe forthcoming negotiations with the big customers,including the European market for 1990, and to reviewthe implementation of the 1989 price-fixing agree-ment (52).

(93) However, it should be noted that according to Daesang,the meeting of 5 October 1989 consisted in fact ofseveral meetings. The discussion on prices for Europeancustomers for 1989 and 1990 were discussed bilaterallybetween Takeda and Miwon and Takeda and Cheilrespectively. Miwon was informed by Takeda that ‘Cheilis basically cooperating, which indicates that Takeda hadpreviously met with Cheil’ (53). A final meeting was heldat 17.00 the same day, but essentially dealing with issuesrelating to the [ ]* market.

(94) It was concluded that there was a huge gap between thetarget price and the actual price of nucleotides. Thetarget prices (including Europe) for 1990 were discussedon the basis of the ‘guidelines for pricing in the Europeanmarket in 1990’, submitted by Takeda and indicatingthree different target prices based on the volume orderedby a customer (large, middle or small customer). Inaddition, Daesang submits that in view of an expectedvisit to Korea by a purchaser from [...], Takeda instructedMiwon to offer [...] a price in accordance with theguidelines (for a reproduction of these guidelines, seebelow).

(A) Europe market — suggested guidelines for 1990

Price (CIF) Target Customer Remarks

USD 30/Kg More than 1 000 kg (large) One lot quantity

USD 31/Kg 500 — 1 000 kg (middle) One lot quantity

USD 32/Kg Less than 500 kg (small) One lot quantity

Source: Annexes J and L to Daesang’s supplementary sub-mission (54).

(95) During the meeting on 5 October 1989, Takeda alsostated that ‘Europe is Takeda territory’ (55).

(52) See pages 2174, 1009 to 1015, 1016 to 1024 and 1025 to1032 of the Commission’s file, respectively.

(53) See page 1965 of the Commission’s file.(54) See Ajinomoto’s supplementary Submission of 17 December

2001, page 4, or page 2260 of the Commission’s file.(55) See page 1009 of the Commission’s file.


(96) Annex M to Daesang’s supplementary submission (56) isan internal fax from Miwon in follow-up of the meetingof 5 October 1989 which states that the basic positionof the (Miwon) headquarters is to try to follow the basiccooperative framework of the Japanese companies. It isfurther stated that the ‘Japanese producers have beenselling (in 1989) at a much lower price than the targetprice in the European market [...]. Therefore it isquestionable, whether the above price guideline will befollowed by the Japanese companies during the 1990contract period’.

(97) The abovementioned guidelines are confirmed by aninternal fax of Ajinomoto dated 6 October 1989, whichspecifies that the guidelines were handed over to theKorean producers. However, for the purpose of theJapanese producers, a separate set of guidelines werealso exchanged on ‘guidelines prices’ to be quoted for1990: USD 28/kg (DEM 52,20/kg) for the big users andUSD 30/kg (DEM) 55,80/kg for the other customers(general market big accounts) (57).

(98) An internal fax from Ajinomoto of 19 December1989 reports on a meeting held between the Japaneseproducers regarding nucleotides prices in Europe for1990 on that same day. According to the fax, Takedasaid that they commenced negotiations with [ ]* and [ ]*during their two recent European trips, but they did notagree. Takeda made an offer to [ ]* at USD 27,50/kg butTakeda wished to make a revised offer price at USD 26/kg. Takeda’s negotiations with [ ]* were still pending (58).

(99) As stated before, the parties to the cartel would alsooccasionally contact each other on a bilateral basis. Thedocuments contained in Annexes N and O to Daesang’ssupplementary submission are good examples of this.

(100) Annex N to Daesang’s supplementary submission (59)contains an internal fax from Mitra to Miwon Japandated 22 November 1989, which expressly indicatedthat Takeda had proposed that, if Miwon would agree tolimit its sales to [...] and [...], Takeda would accept alower standard of product from Miwon as part of itscounterpurchasing arrangement.

(101) Annex O to Daesang’s supplementary submission (60)concerns a telex dated 28 November 1989 from Takeda,which was only received a few days later by Miwon,listing the terms of its purchases from Miwon in 1990,

(56) See pages 1033 to 1036 of the Commission’s file.(57) See page 2260 of the Commission’s file.(58) See Ajinomoto’s supplementary submission of 17 December

2001, page 4, or page 2260 of the Commission’s file.(59) See pages 1037 to 1038 of the Commission’s file.(60) See pages 1039 to 1040 of the Commission’s file.

and also containing the request from Takeda to Miwonto offer a certain price to [...] and [...] and to subsequentlyconfirm its compliance with this request.

(102) According to Daesang, it would no longer agree tocooperate on pricing to [...] and [...] in 1991 unlessTakeda agreed to buy at least 20 tonnes of nucleotidesfrom it and it would not cooperate with regard to [...]unless Takeda would purchase a total of 40 tonnes. Itsfax of 10 November 1990 (61) stated that this matterwas discussed with [ ]* from Takeda when he visitedMitra on 7 November 1990. It is mentioned that ‘Mitrafully agrees to cooperate in order to increase the[worldwide] market price. However, in the future,exports to Europe freely with some customers accounts,so would like to cooperate, in regard to ’91, only withrespect to [...] and [...]. In addition, currently [...] andother customers are continuously requesting offers andif possible looking to confirm contracts. If we [continue]to follow Takeda’s request and offer at a higher price,then it is certain that we will not be able to have [any]contracts’. An internal fax dated 19 November 1990 (62)concerns the same issue. The precise terms of thecounterpurchasing arrangements were also the maintopic discussed at a meeting between Ajinomoto, Take-da’s distributor and Miwon in Tokyo on 1 May 1991 (63).

(103) According to Kyowa’s statement (64), [ ]* of Takedaannounced Takeda’s prices to [...] and [...] to Kyowa at ameeting in January 1991, following a telephone call thathe made to his counterpart at Kyowa, reporting thatTakeda wanted to increase these prices up to a particularlevel as from October 1991.

(104) Ajinomoto submitted an internal memorandum onTakeda’s nucleotides negotiation status for 1992, whichwas presumably written on 21 November 1991. Accord-ing to this memorandum, Takeda informed Ajinomotoregarding the 1992 contract that ‘Takeda was trying toraise the price by two dollars on USD basis (toUSD 28,50) but the negotiation was very difficultbecause the price increase would be very significanton a local currency basis due to the exchange rate’.Furthermore, Takeda complained that [ ]* was receivinglower offers from Ajinomoto (USD 17,20 instead ofTakeda’s USD 17,70) and requested Ajinomoto to offerto sell at USD 18 for 1992, which would be higher thanTakeda’s price (65).

(61) See pages 1041 to 1044 of the Commission’s file.(62) See pages 1045 to 1050 of the Commission’s file.(63) See pages 1051 to 1054 of the Commission’s file.(64) See page 871 of the Commission’s file.(65) See exhibit 7 attached to Ajinomoto’s supplementary submission

of 17 December 2001 or pages 2285 to 2287 of the Com-mission’s file; see also exhibit 8, or pages 2288 to 2290. The firstprice quote (USD 28,50) concerns I & G product (mixture of IMPand GMP), whereas second price quote (USD 17,20 to 18)concerns IMP.


(105) Sometimes, in order to limit the risk of detection, themeetings between competitors were limited to just a fewundertakings who would then act on behalf of certainother competitors. For instance, Daesang submits (66)that a high level two-day meeting was organised on 27and 28 April 1992 between the presidents of Daesang,Cheil and Ajinomoto who acted on behalf of the otherJapanese producers as well because, as Ajinomoto stated,‘it would look suspicious if the Japanese producers allwent to a Korean resort together’.

(106) During this meeting, the cooperation on nucleotideswas discussed. Daesang believes that Ajinomoto alsoattended the meeting on behalf of the other Japaneseproducers including, among others, Takeda (67).

(107) Daesang submits that representatives of Miwon attendeda meeting in Korea on 30 June 1992 with representativesfrom Takeda. No information is given, however, as tothe subject of the meeting (68).

(108) The target prices for 1993 were discussed at a meetingorganised in Tokyo on 20 August 1992. Accordingto Daesang’s statement, the agenda for the meetingconcerned cooperation in setting the international mar-ket price for nucleotides, ‘counterpurchasing’ and restric-tions on sales to the [ ]* market. The final goal, asexpressed by Takeda, was to have one world price,including the Japanese market and for the Japaneseproducers to buy a significant amount of the Koreanproducers’ production. The world target price ([...])presented at the meeting was between USD 30 andUSD 32. After a meeting recess, an agreement wasreached on the world target price. According to Daesang,‘it was clear that the Japanese companies had discussedall the issues amongst themselves before the meetingand had agreed upon a unified presentation’ (69). Insupport of its statement, Daesang has provided a copyof a target price list prepared by Takeda for the purposeof the meeting of 20 August 1992. The list states thatfor Europe, the target prices would be at DEM 48/kg andDEM 45/kg for the big three customers (70). Accordingto Cheil, the Japanese producers requested during thismeeting that prices for Europe be offered only in localcurrencies (71).

(109) On 28 January 1993, the participants met again inTokyo in order to review the implementation efforts toachieve the target price set on 20 August 1992. Duringthis meeting, the parties decided whether the target price

(66) See pages 1970 to 1971 of the Commission’s file.(67) See pages 1061 to 1066 of the Commission’s file.(68) See pages 1067 to 1068 of the Commission’s file.(69) See pages 1069 and 1070 to 1071 and 392 to 393 of the

Commission’s file.(70) Daesang explains that these figures are related to I & G. A

converting rate for prices for IMP and GMP separately is insertedon the bottom of the same target price table.

(71) See Cheil’s statement, page 4, No 2.

set in 1992 should be adjusted and considered ways toachieve it. Daesang submits that the two Korean pro-ducers considered it too difficult to raise prices andasked their Japanese counterparts for permission to sellbelow target price. The Japanese producers refused. TheJapanese argued, among other things, that the Koreanscould sell into Europe at a lower price because theywere not subject to any duty due to the Communitypreferential custom tariff regime (GSP). Even though theparties apparently did not reach a consensus as to howto achieve the target price, everyone reaffirmed thetarget price (72).

(110) Furthermore, regional prices were discussed to see if thecompanies were adhering to the worldwide target priceagreed to at the meeting of 20 August 1992. Specifically,prices in the [ ]*, [ ]* and Europe were discussed. Therealso was a discussion in general about cooperation withregard to the European big three customers (73).

(111) Ajinomoto, Takeda, Miwon and Cheil met again inFukuoka (Japan) on 2 March 1993. During this meetingan adjustment was made to the target prices for thevarious regions for 1993. Furthermore, discussions wereheld to clarify the terms of the counterpurchasingagreements, since the cooperation did not always go assmoothly as the Japanese producers would have liked.Cheil states that the attempt that was made during thismeeting to set the price in the Community area failedbecause the Korean producers wanted to quote a differ-ent price as they benefited from the GSP. Cheil concludesthat ‘in fact, it was the conduct of the Korean companieswhich prevented the arrangements from working moreeffectively’ (74).

(112) Daesang’s minutes of that meeting (75) provide, however,a more detailed version of the events. According toDaesang, the meeting was initially conducted by Ajino-moto’s Deputy General Manager, who threatened toend the counterpurchasing agreements if the Koreancompanies continued to fall behind in their cooperationwith regard to the big three customers, maintaining theagreed world price and restricting their sales to Japan.Cheil and Daesang agreed that the counterpurchasingpractice had to be maintained and, consequently, theyagreed with the Japanese producers to improve theircooperation efforts. Daesang states that it agreed tocooperate with respect to the ‘big three’ customers butwanted Ajinomoto and Takeda to increase the quantityof nucleotides that they purchased from Daesang.Finally, a discussion was held on how the cooperationcould be implemented, regulated and enforced.

(72) See pages 1072 to 1073 of the Commission’s file.(73) See pages 1072 to 1073 of the Commission’s file.(74) See Cheil’s statement, page 5, No 5.(75) See pages 395 to 396 of the Commission’s file.


(113) During the remainder of 1993, Miwon received severalmore visits by Takeda and Ajinomoto representatives.During these visits, the same topics were discussed, i.e.cooperation on the ‘big three’ customers and the worldmarket prices (76).

(114) Further meetings were organised in Seoul and Tokyoand regular contacts by telephone were held betweenthe parties (i.e. meetings between Takeda and Cheil on 7and 26 May 1993 and 30 August 1993, meetingbetween Ajinomoto, Takeda, Cheil and Miwon on 7 July1993). Most of these contacts related to the executionof either the counterpurchasing arrangements (i.e. pricesand quantities), or complaints about non-compliancewith the target prices by one of the (Korean) participants.

(115) Prices to particular customers were also discussed: on13 September 1993, for example, Takeda phoned Cheilto inform Cheil of the prices that were to be quoted tothe European big three customers ([ ]*, [ ]* and [ ]*). Inaddition, the relationship between IMP, GMP and I & Gprices was discussed (see Cheil’s statement).

(116) On 25 January 1994, a meeting was organised betweenCheil and Takeda to discuss the continuation of thecounterpurchasing contract. It was agreed that thequantity and price would be kept the same as in 1993.According to Cheil, Takeda complained that Cheil didnot comply with the existing arrangements for Europe,[ ]* and the [ ]*. For example, Takeda is said to havecomplained to Cheil about the fact that [ ]* had askedTakeda to reduce its price for IMP to USD 16,5/kg afterCheil had offered a quote at this level to [ ]*.

(117) Cheil submits that the minutes it kept of this meetingindicate clearly that the incumbent Japanese producersplayed the leading role. Following discussions betweenCheil and Takeda concerning the ‘counter procurement’by the Japanese industry, Takeda is reported to havestated that a final decision in this respect would be takenin a meeting between Ajinomoto and Takeda (77).

(118) On 25 August 1994 (78), a meeting took place in Tokyo.The records of the meeting of Cheil and Miwon showthat at this meeting, the international market prices andsales prices of nucleotides were discussed. The partiesexchanged their opinions on the new target prices to bequoted. The Japanese wished to increase the internationalprices. According to Cheil’s business report of thatmeeting (79), Takeda suggested that the parties raise theprice up to USD 30/kg at a stroke, whereas the otherssuggested that they raise the prices by USD 1 to 2/kgstep by step. Cheil submits that the Japanese complainedabout the lack of compliance by the Korean companies.

(76) See page 1935 of the Commission’s file.(77) See page 306 of the Commission’s file.(78) Daesang submits that the Japanese producers had a premeeting

on 24 August 1994 in preparation of the meeting of 25 August1994 with the two Korean producers (see page 5 of its statement,page 1935 of the Commission’s file).

(79) See pages 392 to 393 of the Commission’s file.

(119) Finally, the parties discussed their cooperation on theEuropean big three customers. In particular, Ajinomotoasked Cheil and Daesang to refrain from selling to [ ]*.As a conclusion to the meeting, it was agreed to holdanother meeting in Seoul in the middle of Septem-ber 1994 where the main issues would be the following:‘(a) price raise: setting target price at USD 30/kg;(b) Cheil and Miwon would define their attitude to big 3(especially [ ]*)’ (80).

(120) Earlier, on 7 and 8 July 1994, there had been ameeting between the Japanese and the Korean producersconcerning the 1995 price offer for Europe. It followsfrom Cheil’s minutes of this meeting that the Japaneseproducers insisted strongly on raising prices in 1995.The Korean producers were requested to offer a pricelower than that of the Japanese products by USD 2/kg.The minutes continue with an internal memo with oneclear message: ‘Please, try to raise the price based on theshortage of Korean makers and yen appreciation’ (81).

(121) According to Cheil, another meeting was held on6 October 1994 between Ajinomoto, Takeda and Cheilat the Hotel Lotte in Seoul where the Korean cooperationin Europe regarding the ‘big three’ customers wasdiscussed. Other items on the agenda were the Koreancooperation on the [ ]* market and an overview of the[ ]* market (including Cheil’s sales to a [ ]* client, whichalready formed the object of disputes between Cheil andthe Japanese producers). Cheil submits that it did notmake any commitments during this meeting, using theabsence of Miwon as an excuse (82).

(122) An internal fax from Ajinomoto dated 17 October 1994reports on a telephone conversation between Miwon,Cheil and Ajinomoto showing that Ajinomoto askedCheil to make an offer to [ ]* Europe one week earlierthan Ajinomoto’s offer to the same company. Cheilreplied that they would accept if Miwon accepted first.Regarding the price offer, Cheil said that they wouldinstruct their people to offer to sell at DEM 49,50/kgbut refused to make an offer at DEM 50/kg. Miwondemanded that Ajinomoto purchase an additionalamount of product from Miwon as a condition foraccepting Ajinomoto’s request to offer to [ ]* at a highprice.

(123) Takeda and Miwon met in Seoul on 6 February 1995 (83)to discuss world prices for nucleotides as well as thecounterpurchasing conditions.

(80) See pages 397 to 404 of the Commission’s file.(81) See Cheil’s statement, page 6 and Annex 5.(82) See page 307 of the Commission’s file.(83) See pages 1937 and 405 to 410 in the Commission’s file.


(124) On 16 and 17 October 1995, a meeting was held inTakeda’s head office in Tokyo. Ajinomoto, Takeda, Cheiland Daesang attended. According to Daesang, duringthis meeting the nucleotide world markets and thesituation concerning the ‘big three’ were discussed.Current prices in various countries and regions (includ-ing Europe) were discussed to see if the target priceswere met or should be adjusted. Ajinomoto gave pricesthat other producers should offer to [ ]* and the otherproducers agreed. Takeda is said to have done the samewith respect to [ ]* and [ ]* and the others, includingAjinomoto, agreed (84).

(125) Prior to this meeting, several other meetings took placebetween the parties bilaterally and between the fourproducers. Daesang submits that between April 1995and 16 October 1995, it attended approximately threeor four meetings with Ajinomoto at Mitra’s head officein Seoul and approximately one or two meetings withTakeda at the same offices. There were approximatelytwo or three meetings at a conference room in the LotteHotel which all four producers attended. At each ofthese meetings, the parties would review prices invarious regions to see if target prices previously agreedto were being met or should be maintained, lowered orraised. Some of the target prices were increased (i.e. the[ ]* target price was maintained even though it wasconverted into a price per pound rather than a price perkilo). The parties also discussed and agreed to theconcept of raising the market prices in various regionsas a basis for raising the price to the European big threecustomers (85).

(126) The participants of the cartel met in Seoul during themonth of December in order to review the 1995cooperation. According to the report of the meeting (86),Ajinomoto led the meeting and thanked everyone fortheir cooperation during 1995 which resulted in theeffective implementation of nucleotide price increasesand asked everyone to continue their cooperation in1996 so as to further increase the nucleotide prices. MrC.H. Kim of Daesang is said to have said that he wouldand the other participants ‘showed their agreement bynodding or saying words to that effect’.

(127) According to Daesang’s statement (87), the four pro-ducers (Takeda, Ajinomoto, Daesang and Cheil) met on7 March 1996 in Seoul in order to fix the 1996 targetprice for sales to the ‘big three customers’. Ajinomotoproposed an international target price of USD 35/kg.With regard to the European market in general, Takedasuggested that a new price should be applied in Europe

(84) See page 1075 of the Commission’s file.(85) See pages 1937 to 1939 and 405 to 423 of the Commission’s

file.(86) See page 1076 of the Commission’s file.(87) See page 10 of its statement or page 1940 of the Commission’s

file; see also Annex 12 to its statement, pages 426 to 427 of theCommission’s file.

by the end of August 1996. Ajinomoto suggested thatthis price should be set at DEM 51/kg. Takeda submitteda copy of its report of that meeting to the Com-mission (88).

(128) According to this meeting memo, there was a commonunderstanding between the participants regarding a priceimprovement to be realised in 1996. Each companyconfirmed that it would not change the current supplyamount and agreed that price improvement would bethe priority. According to the meeting memo, theparticipants discussed the policy of improvement of the1996 prices, with the 1997 price plan for the big three(European) customers in mind. It was agreed that thetarget price for the three big companies should beUSD 35/kg (about 10 % up) on a USD basis. In order toachieve this price, the nucleotide producers wouldprepare a price improvement schedule for the generalmarket prices, which should reach the level of USD 35/kg by September/October (1996).

(129) On 21 May 1996, Ajinomoto requested and obtained ameeting with Miwon about the low price sales of Miwonin Europe. Concerning Europe, Ajinomoto informedMiwon that it was negotiating the price for the secondhalf of 1996 with European customers, but that a priceincrease in Germany and Spain would be very difficult.Ajinomoto noted that in Spain the price level wasDEM 44 to 45/kg, but that it should have been DEM 49/kg based on the price in 1995. A European target priceof DEM 50/kg was agreed as of June 1996, with theexception of sales to the ‘big three customers’ (89).

(130) The same day, Ajinomoto also met with Cheil in orderto discuss the implementation of the agreed priceincreases. Cheil is said to have stated that such priceincreases would not be possible in Europe beforeJuly 1996. Ajinomoto insisted that the agreed prices beimplemented by the end of August 1996 (90).

(131) According to Daesang’s supplementary submission (91),discussions on the prices to be charged to the big threecustomers for 1997 started during a meeting held on3 July 1996. A new European target price was proposedby Takeda and the other parties commented on thatproposal during the meeting.

(88) Takeda rightly observed in its reply to the statement of objectionsthat it had confirmed that although the memo refers to 17 March1996, rather than 7 March, reference is actually made to themeeting held on 7 March. (In fact, the memo also states theconclusions drawn at the meeting, whilst having been drafted on12 March 1996).

(89) See page 1941 of the Commission’s file.(90) See Annex 5 attached to Cheil’s statement, pages 2610 to 2612

of the Commission’s file.(91) See pages 12 and 13 of Daesang’s statement, pages 1942 to

1943 of the Commission’s file.


(132) Miwon and Takeda met again on 9 July 1996 inNew Jersey, USA and discussed the market price ofnucleotides in the world. Takeda asked Daesang for itscooperation in pricing (92).

(133) Somewhere in the summer of 1996, Ajinomoto, Takeda,Miwon and Cheil met again in order to discuss thecurrent situation of nucleotides markets, including Euro-pe, and exchange information on sales prices (93).

(134) At a meeting on 29 August 1996 in Seoul, Takedainformed the others (94) of the price that it planned tooffer to [...] for 1997 and asked the others to offer at ahigher price (DEM 54/kg). Takeda also asked the othersto inform it in case [...] requested a price offer fromthem. Takeda also suggested different reasons that couldbe given to customers to justify a price increase (95).

(135) It should also be noted that bilateral meetings werealso used to influence the outcome of the ‘general’competitors meetings. For example, Ajinomoto andMiwon held a meeting on 28 August 1996, one daybefore the actual competitors meeting, where Ajinomotoadvocated a price increase for the customer [...] for1997. According to Daesang, Ajinomoto wanted tosecure the support of Miwon before the actual meetingbetween competitors took place (96).

(136) Takeda submits in this respect that following the USinvestigations into Ajinomoto’s involvement in a world-wide cartel on lysine, Ajinomoto avoided attending thefour-party meetings with other nucleotides producers(as from August 1996) although it continued to partici-pate in the nucleotides arrangements. Instead, it con-tinued to hold direct bilateral contacts with Takeda,usually before or after those meetings. According toTakeda, Ajinomoto expected Takeda to use the infor-mation given by Ajinomoto as a basis for the talks withthe Korean producers (97). In reply to the statement ofobjections, Ajinomoto submits that these allegations areincorrect and are not corroborated by evidence. Theexact duration of Ajinomoto’s participation in thecartel arrangements is discussed in more detail under‘Duration’.

(137) According to Daesang, it was informed by Takeda thatall parties had reached an agreement on the prices forthe big three customers during a round of golf organisedbetween representatives of Miwon and Takeda in NewJersey on 10 September 1996.

(92) See Daesang’s statement, page 1943 of the Commission’s file.(93) See Daesang’s statement, page 1944 of the Commission’s file.(94) Cheil, Daesang and Ajinomoto.(95) See page 1945 of the Commission’s file.(96) See page 1944 of the Commission’s file.(97) See pages 2171 to 2172 of the Commission’s file.

(138) According to a report submitted by Takeda, a meetingwas held in March 1997 between Takeda, Cheil andDaesang and an agreement was reached on target pricesof USD 30 (98).

(139) The target prices that were set for 1997 appeared to bedifficult to maintain. A meeting was organised in Seoulbetween 26 to 28 May 1997. According to Takeda’sreport of this meeting (99), an agreement was reached toset the current overseas price at USD 25/kg for 1997, ‘alevel falling short of USD 30 agreed upon in theMarch 1997 meeting’. The report continues that ‘pro-ceeding from the judgment that price improvements arenecessary before the next year’s contracts are negotiatedwith the different major European companies scheduledfor autumn, we exchanged views with the two compani-es (Cheil and Daesang) on the range of price improve-ment and the timing (schedules)’.

(140) Finally, they agreed on an improvement up to USD 29to 31/kg for the following year. A price-fixing agreementwas equally reached for [ ]*, one of the Europeancustomers. According to Takeda’s report of that meet-ing (100), the contract price to [ ]* that was agreed uponfor 1997 stood at DEM 48/kg USD 32/kg. An increasewould be sought of around 6 % (DEM 51/kg), butTakeda acknowledged that attaining such an increasewould be difficult.

(141) Takeda visited Miwon in Amsterdam on 3 June 1997.The items discussed at this meeting were the nucleotidemarket in Europe, sales by Miwon to [...], [...] and [...]and the exchange of information on prices in Europeand possibilities for price improvements. A similarmeeting was held between Takeda and Cheil in Frankfurton 9 June 1997 where information was also exchangedon prices in Europe and the possibility of improvingthese prices (101).

(142) Takeda met again with Miwon in New Jersey, USA on10 July 1997 and 16 September 1997 in order todiscuss the nucleotides market in general (102).

(143) According to Takeda’s corporate statement, Takeda’s [ ]*met for the first time with his new counterpart atAjinomoto on 25 July 1997. At this meeting, whichtook place at a restaurant in Tokyo, they discussed howthe nucleotides market had been organised between themanufacturers in recent years and they exchangedtheir companies’ views in relation to price strategy.Ajinomoto, on the other hand, states that duringthis and later meetings, to the best of Ajinomoto’sknowledge, ‘European target prices or customers werenot discussed’.

(98) See page 2146 of the Commission’s file.(99) See page 2146 of the Commission’s file.

(100) See page 1946 of the Commission’s file.(101) See pages 2217 to 2220 of the Commission’s file.(102) See Daesang’s statement, page 1947 of the Commission’s file.


(144) The information provided by Takeda with regard to thismeeting, as well as to the meeting held in Septem-ber 1997, provides a somewhat different picture. Taked-a’s report of that meeting (103) clearly mentions that,among other things, Ajinomoto informed Takeda ‘thatAjinomoto had already suggested a 10 % increase on aDEM basis (to around DEM 51?) to their distributors fornext year [...]’. Takeda mentioned to Ajinomoto that‘they understood their increase in DEM pricing with achange to dollar pricing in mind, but that [this]depend[s] on how this was passed on the other compani-es, Takeda, Cheil and Miwon’. Takeda also informedAjinomoto that it would decide on pricing towards [ ]*and [ ]* based upon the European market researchplanned for early October (104).

(145) About a month later, Takeda met with representativesof Cheil and Miwon separately in bilateral meetings on27 to 29 August 1997. According to Takeda, the mainsubject of the meetings were the counterpurchasingagreements, but it is possible that the companies alsomentioned the forthcoming annual contract nego-tiations with the three big customers at this meeting.Daesang submits that it also met with Takeda in theUSA on 10 July 1997 and 16 September 1997 anddiscussed the nucleotides market in general (105).

(146) In September 1997, Takeda met again with Ajinomoto.According to Takeda, Ajinomoto communicated that itsought a 15 % price increase for 1998 and a minimumof 10 % (106). In a contemporaneous document submit-ted by Takeda related to this meeting (107), it is statedthat ‘the head office of each company seems to havedecided [upon] the offered price from A[jinomoto],C[heil] and MW (Miwon/Daesang) to [...]* and theoffered price from T[akeda] to [...]*, [...]* for contractnegotiations for the next year. We assumed that inEurope, the products of C[heil] and MW (Miwon) wouldget GSP treatment’ (108).

(103) See page 2223 of the Commission’s file.(104) In its reply to the Commission’s statement of objections,

Ajinomoto contests Takeda’s description of these events, asfurther discussed in detail under ‘Duration’.

(105) See pages 1947 and 1974 of the Commission’s file.(106) See page 2176 of the Commission’s file; Ajinomoto contests

this description of events, as further discussed in relation to theduration of Ajinomoto’s participation in the infringement.

(107) See page 2224 of the Commission’s file.(108) The translation provided by Ajinomoto in its statement of

29 November 2002 reads as follows: ‘Seems that the head officeof each company has studied and tentatively decided on theprice to be proposed at the negotiation for the next year contractscheduled for October and November by A, C, MW with [ ]*and by T with [ ]* and [ ]* groups. On the premise that C’s andMW’s product will continue to enjoy GSP in Europe next year’.

(147) According to Daesang, Miwon held a meeting withTakeda in Seoul in October 1997 where they had ageneral discussion about the declining price for nucleo-tides in the world market (109).

(148) Cheil submits that it held meetings with Takeda on 24and 26 March 1998 in Seoul and that on theseoccasions (110), the worldwide nucleotide market andproduction was discussed. Another meeting betweenCheil and Takeda has been identified on 2 June 1998and Cheil submits that the items discussed concernedthe price decline for nucleotides and Cheil’s low-pricedsales on the Japanese market.

(149) No other cartel related meetings have been identified.

PART II — LEGAL ASSESSMENT

A. JURISDICTION (APPLICATION OF THE TREATY ANDTHE EEA AGREEMENT)

1. RELATIONSHIP BETWEEN THE TREATY AND THE EEAAGREEMENT

(150) The arrangements set out above applied to most of theMember States and to the EEA (Norway and, prior to itsaccession to the Community, Austria).

(151) The EEA Agreement, which contains provisions oncompetition analogous to the Treaty, came into force on1 January 1994. This Decision therefore includes theapplication as from that date of those rules (primarilyArticle 53(1) of the EEA Agreement) to the arrangementsto which objection is taken.

(152) In so far as the arrangements affected competition andtrade between Member States, Article 81 of the Treaty isapplicable. In so far as the cartel operations had aneffect on trade between the Community and the EFTAcountries or between EFTA countries which were partof the EEA, Article 53 of the EEA Agreement isapplicable.

(153) If an agreement or practice affects only trade betweenMember States, the Commission retains competence andapplies Article 81(1) of the Treaty. If an agreementaffects only trade between EFTA/EEA States, then theEFTA Surveillance Authority (ESA) is alone competentand applies the EEA competition rules, in particularArticle 53(1) of the EEA Agreement (111).

(109) See Daesang’s statement, pages 1947 to 1948 of the Com-mission’s file.

(110) See page 309 of the Commission’s file.(111) Pursuant to Article 56(1)(b) of the EEA Agreement, and without

prejudice to the competence of the Commission where tradebetween Member States is affected, the ESA is also competentin cases where the turnover of the undertakings concerned inthe territory of the EFTA States equals 33 % or more of theirturnover in the territory of the EEA.


(154) In this case, the Commission is the competent authorityto apply both Article 81(1) of the Treaty andArticle 53(1) of the EEA Agreement on the basis ofArticle 56 of that Agreement, since the cartel hadan appreciable effect on trade between the MemberStates (112).

B. APPLICATION OF ARTICLE 81 OF THE TREATY ANDARTICLE 53 OF THE EEA AGREEMENT

1. ARTICLE 81(1) OF THE TREATY AND ARTICLE 53(1) OF THEEEA AGREEMENT

(155) Article 81(1) of the Treaty prohibits as incompatiblewith the common market all agreements between under-takings, decisions by associations of undertakings orconcerted practices which may affect trade betweenMember States and which have as their object or effectthe prevention, restriction or distortion of competitionwithin the common market, and in particular thosewhich directly or indirectly fix purchase or sellingprices or any other trade conditions, limit or controlproduction and markets, or share markets or sources ofsupply.

(156) Article 53(1) of the EEA Agreement (which is modelledon Article 81(1) of the Treaty) contains an identicalprohibition of agreements, decisions and concertedpractices but substitutes the conditions of effect ontrade between Member States with ‘between contractingparties’ (in this context ‘contracting parties’ means theCommunity and the individual (then) EFTA States), andthe prevention, restriction or distortion of competitionwithin the common market with ‘within the territorycovered by ...[the EEA] Agreement’.

2. AGREEMENTS AND CONCERTED PRACTICES

(157) Article 81(1) of the Treaty and Article 53 of the EEAAgreement prohibit agreements, decisions of associ-ations and concerted practices.

(158) An agreement can be said to exist when the partiesadhere to a common plan which limits or is likely to limittheir individual commercial conduct by determining thelines of their mutual action or abstention from action inthe market. It does not have to be made in writing, noformalities are necessary, and no contractual sanctionsor enforcement measures are required. The fact ofagreement may be express or implicit in the behaviourof the parties.

(159) In its judgment in Joined Cases T-305/94 etc. LimburgseVinyl Maatschappij NV and others v Commission (PVCII) (113), the Court of First Instance stated (in para-graph 715) that ‘it is well established in the case-law thatfor there to be an agreement within the meaning of

(112) See Chapter 5 ‘Effect upon trade between the Members Statesand between EEA contracting parties’.

(113) [1999] ECR II-931.

Article [81(1)] of the Treaty it is sufficient for theundertakings to have expressed their joint intention tobehave on the market in a certain way’.

(160) An ‘agreement’ for the purpose of Article 81(1) of theTreaty does not require the same certainty as would benecessary for the enforcement of a commercial contractat civil law. Moreover, in the case of a complex cartel oflong duration, the term ‘agreement’ can properly beapplied not only to any overall plan or to the termsexpressly agreed but also to the implementation of whathas been agreed on the basis of the same mechanismsand in pursuance of the same common purpose.

(161) As the Court of Justice (upholding the judgment of theCourt of First Instance) pointed out in Case C-49/92PCommission v Anic Partecipazioni SpA (114), in para-graph 81, it follows from the express terms ofArticle 81(1) of the Treaty that that agreement mayconsist not only in an isolated act but also in a series ofacts or course of conduct.

(162) A complex cartel may thus properly be viewed as asingle continuing infringement for the time frame inwhich it existed. The agreement may well be varied fromtime to time, or its mechanisms adapted or strengthenedto take account of new developments. The validity ofthis assessment is not affected by the possibility that oneor more elements of a series of actions or of a continuouscourse of conduct could individually and in themselvesconstitute a violation of Article 81(1) of the Treaty.

(163) Although a cartel is a joint enterprise, each participantin the agreement may play its own particular role. Oneor more may exercise a dominant role as ringleader(s).Internal conflicts and rivalries or even cheating mayoccur, but will not however prevent the arrangementfrom constituting an agreement/concerted practice forthe purposes of Article 81(1) of the Treaty where thereis a single common and continuing objective.

(164) The mere fact that each participant in a cartel mayplay the role which is appropriate to its own specificcircumstances does not exclude its responsibility for theinfringement as a whole, including acts committed byother participants but which share the same unlawfulpurpose and the same anti-competitive effect. An under-taking which takes part in the common unlawfulenterprise by actions which contribute to the realisationof the shared objective is also responsible, for the wholeperiod of its adherence to the common scheme, for theacts of the other participants pursuant to the sameinfringement. This is certainly the case where it isestablished that the undertaking in question was awareof the unlawful behaviour of the other participants orcould have reasonably foreseen or been aware of themand was prepared to take the risk (Judgment of the Courtof Justice in Commission v Anic, paragraph 83.)

(114) [1999] ECR I-4125.


(165) Article 81 of the Treaty (115) draws a distinction betweenthe concept of ‘concerted practice’ and that of ‘agree-ments between undertakings’ or of ‘decisions by associ-ations of undertakings’ in order to bring within theprohibition of that Article any form of coordinationbetween undertakings which, without having reachedthe stage where an agreement properly so-called hasbeen concluded, knowingly substitutes practical cooper-ation between them for the risks of competition. Evenwhere the parties have not explicitly subscribed to acommon plan defining their action in the market butknowingly adopt or adhere to collusive devices whichfacilitate the coordination of their commercial behav-iour, the conduct may still fall under Article 81(1) of theTreaty as a ‘concerted practice’ (116).

(166) It is not necessary, however, particularly in the case ofa complex infringement of long duration, for theCommission to characterise it as exclusively one or otherof these forms of illegal behaviour (117). The concepts ofagreement and concerted practice are fluid and mayoverlap. Indeed, it may not even be possible realisticallyto make any such distinction, as an infringement maypresent simultaneously the characteristics of each formof prohibited conduct while, considered in isolation,some of its manifestations could accurately be describedas one rather than the other. It would however beartificial analytically to subdivide what is clearly acontinuing common enterprise having one and thesame overall objective into several different forms ofinfringement. A cartel may therefore be an agreementand a concerted practice at the same time. Article 81 laysdown no specific category for a complex infringement ofthe present type (118).

(115) The case-law of the Court of Justice and the Court of FirstInstance analysed under this heading in relation to the interpret-ation of the terms ‘agreements’ and ‘concerted practices’ inArticle 81 of the Treaty expresses principles well establishedbefore the signature of the EEA Agreement. It therefore alsoapplies to these terms in so far as they are used in Article 53 ofthe EEA Agreement. References to Article 81 of the Treatytherefore also apply to Article 53 of the EEA Agreement.

(116) See judgment of the Court of First Instance in Case T-7/89Hercules v Commission [1991] ECR II-1711, paragraph 256. Seealso Case 48/69, Imperial Chemical Industries v Commission [1972]ECR 619, paragraph 64 and Joined Cases 40-48/73, etc. SuikerUnie and others v Commission [1975] ECR 1663.

(117) See also the judgment in PVC II, where it is stated that ‘[i]n thecontext of a complex infringement which involves manyproducers seeking over a number of years to regulate the marketbetween them, the Commission cannot be expected to classifythe infringement precisely, for each undertaking and for anygiven moment, as in any event both forms of infringement arecovered by Article [81] of the Treaty’.

(118) Judgment of the Court of First Instance in Case T-7/89 Herculesv Commission, paragraph 264.

3. SINGLE CONTINUOUS INFRINGEMENT

(167) In this case, the manufacturers of nucleotides adhered,over a long period of time, to a common scheme whichlaid down the lines of their action in the market andrestricted their individual commercial conduct. As such,the arrangements present the characteristics of an agree-ment in the sense of Article 81(1) of the Treaty, althoughsome factual elements of the illicit conduct could aptlybe described as a concerted practice were it appropriateto do so.

(168) From the end of 1988 to June 1998, there is ampleevidence to show the existence of this single andcontinuous collusion in the EEA market for nucleotidesbetween Takeda (119), Ajinomoto (120), Daesang (121) andCheil (122) which together account for virtually the entiremarket. Indeed, the parties expressed to each other theirjoint intention to behave on the market in a certain wayand adhered to a common plan to limit their individualcommercial conduct. The agreement to enter into thisplan with a view to restrict competition can therefore bedated back at least to 1988. This collusion was in pursuitof a single anti-competitive economic aim: preventingprice competition by agreeing on target prices and priceincreases.

(169) Given the common design and common objectivewhich the producers steadily pursued of eliminatingcompetition in the nucleotides market, the Commissionconsiders that the conduct in question constituted asingle continuing infringement of Article 81(1) of theTreaty in which each participant must bear its responsi-bility for the duration of its adherence to the commonscheme. These arrangements are described in detail inthe factual part of this Decision. This description issupported by widespread and clear evidence, systemati-cally referred to throughout the text.

4. RESTRICTION OF COMPETITION

(170) The complex of agreements in this case had the objectand effect of restricting competition in the Communityand EEA.

(119) With regard to Takeda, from 8 November 1988 until 2 June1998.

(120) With regard to Ajinomoto, from 8 November 1988 untilSeptember 1997.

(121) With regard to Daesang, from 19 December 1988 until31 December 1997.

(122) With regard to Cheil, from (end of) March 1989 until 2 June1998.


(171) Article 81(1) of the Treaty and Article 53(1) of theEEA Agreement expressly mention as restrictive ofcompetition agreements which:

‘directly or indirectly fix selling prices or any othertrading conditions; (b) limit or control production,markets or technical development or, (c) share marketsor sources of supply’.

The list is not exhaustive.

(172) In the complex of agreements and arrangements con-sidered in this case, the following elements can beidentified as relevant in order to find a breach ofArticle 81(1) of the Treaty and Article 53(1) of the EEAAgreement:

— allocating customers,

— allocating markets,

— agreeing target and minimum prices,

— agreeing concerted price increases,

— exchanging information on sales figures so as tomonitor the implementation of the target prices,

— participating in regular meetings and other contactsin order to agree the above restrictions and toimplement and/or modify them as required.

(173) These kinds of arrangements have as their object therestriction of competition within the meaning ofArticle 81(1) of the Treaty and Article 53(1) of theEEA Agreement. Price being the main instrument ofcompetition, the various collusive arrangements andmechanisms adopted by the producers were all ulti-mately aimed at an inflation of the price to their benefitand above the level which would be determined byconditions of free competition.

(174) In order to conclude that Article 81(1) of the Treaty and53(1) of the EEA Agreement apply, there is no need toconsider the actual effects upon competition of anagreement once it is established that the agreements hadthe object of restricting competition (123).

(123) Judgment of the Court of First Instance, in Joined Cases T-25/95 etc Cimenteries CBR and others v Commission [2000] ECR II-491, paragraph 3927. See also judgment in Cases T-374/94,T-375/94, T-384/94 and T-388/94, European Night Services andothers v Commission [1998] ECR II-3141, paragraph 136, wherethe Court has confirmed this in specific relation to price-fixingagreements.

(175) However, the cartel also had a restrictive effect oncompetition. In fact, the cartel arrangements involvedthe major worldwide nucleotides producers and wereconceived, directed and encouraged at high levels ineach participating company (124). The target prices, pricerises and customer allocation, which were the primaryobjective of the cartel, were agreed, announced tocustomers and implemented throughout the EEA.

(176) In their replies to the statement of objections, Cheiland Ajinomoto claim that the restrictive impact oncompetition was very limited. Ajinomoto further arguesthat the Commission’s conclusion is based on inconclus-ive evidence, having failed to demonstrate sufficientlythe impact of the arrangements on the market. Therestrictive effect of the arrangements in questions isestablished in more detail in recitals 224 to 238.

5. EFFECT UPON TRADE BETWEEN MEMBER STATES ANDBETWEEN EEA CONTRACTING PARTIES

(177) The continuing agreement between the producers hadan appreciable effect upon trade between Member Statesand between contracting parties of the EEA.

(178) Article 81(1) of the Treaty is aimed at agreements whichmight harm the attainment of a single market betweenthe Member States, whether by partitioning nationalmarkets or by affecting the structure of competitionwithin the common market. Similarly, Article 53(1) ofthe EEA Agreement is directed at agreements whichundermine the realisation of a homogeneous EuropeanEconomic Area.

(179) According to the case-law of the Court, ‘in order that anagreement may affect trade between Member States, itmust be possible to foresee with a sufficient degree ofprobability on the basis of a set of objective factors oflaw that it may have an influence, direct or indirect,actual or potential, on the pattern between MemberStates’ (125). In any event, Article 81(1) of the Treaty‘does not require that agreements referred to in thatprovision have actually affected trade between MemberStates, it does require that it be established that theagreements are capable of having that effect’ (126).

(124) See above, under ‘Participants’.(125) Judgment in Joined Cases C-215/96 and C-216/96 Bagnasco v

Banca popolare di Novale and others [1999] ECR I-135, para-graphs 47 and 48.

(126) Judgment in Case C-306/96 Javico v Yves Saint Laurent [1998]ECR I-1983, paragraphs 16 and 17; see also Joined Cases T-374/94 etc European Night Services and others v Commission [1998]ECR II-3141, paragraph 136.


(180) As demonstrated in the section ‘inter-State trade’, thenucleotides market is characterised by an importantvolume of trade between the Member States. Althoughnone of the nucleotide producers had any productioncapacity based in the EEA during the relevant period,nucleotide was marketed in virtually all States of theEEA territory, either through wholly owned sales subsidi-aries, or through distributors established in only a fewof the Member States. There was also a considerablevolume of trade between the Community and the EFTAcountries that are members of the EEA. Norway imports100 % of its requirements, primarily from the Com-munity, and prior to the accession of Austria, Finlandand Sweden, these countries imported the totality oftheir requirements of nucleotides.

(181) The application of Article 81(1) of the Treaty andArticle 53(1) of the EEA Agreement to a cartel is not,however, limited to that part of the members’ saleswhich actually involve the transfer of goods from oneState to another. Nor is it necessary, in order for theseprovisions to apply, to show that the individual conductof each participant, as opposed to the cartel as a whole,affected trade between Member States (127).

(182) In this case, the cartel arrangements covered virtually alltrade throughout the world, including the Communityand EEA. The existence of price-fixing and customerallocation mechanisms must have resulted, or have beenlikely to result, in the automatic diversion of tradepatterns from the course they would otherwise havefollowed (128).

6. PROVISIONS OF COMPETITION RULES APPLICABLE TOAUSTRIA, FINLAND, ICELAND, LIECHTENSTEIN, NORWAY

AND SWEDEN

(183) The EEA Agreement entered into force on 1 January1994. For the period prior to that date during which thecartel operated, the only provision applicable to theseproceedings is Article 81 of the Treaty; in so far asthe cartel arrangements within that period restrictedcompetition in Austria, Finland, Iceland, Liechtenstein,Norway and Sweden (then EFTA Member States) theywere not caught by that provision.

(184) In the period 1 January to 31 December 1994, theprovisions of the EEA Agreement applied to Austria,Finland, Iceland, Liechtenstein, Norway and Sweden; thecartel thus constituted a violation of Article 53(1) of theEEA Agreement as well as of Article 81(1) of theTreaty, and the Commission is competent to apply bothprovisions. The restriction of competition in those sixEFTA States during that one year period falls underArticle 53(1) of the EEA Agreement.

(127) See judgment in Case T-13/89 ICI v Commission [1992] ECR II-1021, paragraph 304.

(128) Judgment in Joined Cases 209 to 215 and 218/78, VanLandewyck and others v Commission [1980] ECR 3125, para-graph 170.

(185) After the accession of Austria, Finland and Sweden tothe Community on 1 January 1995, Article 81(1) of theTreaty became applicable to the cartel in so far as itaffected competition in those markets. The operation ofthe cartel in Norway, Iceland and Liechtenstein remainedin violation of Article 53(1) of the EEA Agreement.

(186) In practice, it follows from the above that in so faras the cartel operated in Austria, Finland, Iceland,Liechtenstein, Norway and Sweden, it constituted aviolation of the EEA and/or Community competitionrules as from 1 January 1994.

C. ADDRESSEES

1. PRINCIPLES APPLICABLE

(187) In order to identify the addressees of this Decision, it isnecessary to determine the legal entities to which theresponsibility for the infringement should be imputed.

(188) The subject of Community and EEA competition rules isthe ‘undertaking’, a concept that is not identical withthe notion of corporate legal personality in nationalcompany or fiscal law. The term ‘undertaking’ is notdefined in the Treaty. It may however refer to any entityengaged in a commercial activity.

(189) When an infringement of Article 81(1) of the Treatyand/or Article 53(1) of the EEA Agreement is found tohave been committed over a given period of time, it isnecessary to identify the natural or legal person whowas responsible for the operation of the undertaking atthe time when the infringement was committed, so thatit can answer for it.

(190) A change in legal form or corporate identity does nothowever relieve an undertaking of liability to penaltiesfor the anti-competitive behaviour. Liability for a finemay thus pass to a successor where the corporateidentity which committed the violation has ceased toexist in law.

2. ADDRESSEES OF THE DECISION

(191) In this procedure no issue arises regarding the appropri-ate addressee of the Decision and it will be sent to thoselegal entities directly involved in the infringement.


(192) In the case of Miwon Corporation (129), which changedlegal form in November 1997, this assessment is inconformity with the Commission’s normal practice andcurrent case-law (130). Miwon Corporation Limited’s fullmerger with Sewon Co. Ltd to form Daesang Corpor-ation (131) means that responsibility passes to the newentity. There is an obvious continuity between Miwonand the new entity into which it has been subsumed.Miwon ceased to exist in law and its legal personality aswell as all its assets and staff were transferred to DaesangCorporation.

D. DURATION OF THE INFRINGEMENT

(193) Although certain evidence submitted to the Commission(see recital 77) indicates that the initial contacts betweenthe Japanese producers go back as far as 1986, theCommission will, for the purpose of these proceedings,limit its assessment under the competition rules and theapplication of any fines to the period from 8 November1988, this being the date of the first known meetingbetween the Japanese producers where prices for theforthcoming negotiations with the big three customerswere discussed and agreed upon (see recital 79). Thestarting date of the infringement taken into account withregard to Takeda and Ajinomoto will therefore be8 November 1988.

(194) As far as Daesang is concerned, it admits havingconcluded a counterpurchasing agreement with Ajino-moto on 19 December 1988, when it was verballyagreed that the condition for this contract was thatMiwon was not to increase its sales to [ ]* and not toobstruct the [ ]* producers’ cooperation on worldprices (132). The Commission will therefore take19 December 1988 as the starting date of the infringe-ment with regard to Daesang.

(195) According to a business trip report (133), the first meetingof the manufacturer(s) of nucleotide in which Cheilparticipated was held between 7 and 23 March 1989.The same business report indicates that attendantsagreed to meet again in Kyung Ju, Korea on 7 June 1989(according to Daesang, this is the meeting where thetarget prices for 1989 were agreed upon).

(129) Miwon Corporation Limited participated in the infringementthrough its subsidiaries Miwon Japan Inc. and Mitra (MiwonTrading & Shipping Company) as well as directly (see forexample Annexes T and U of Daesang’s supplementary sub-mission).

(130) Case C-49/92 P, Commission v Anic Partecipazioni SpA, para-graph 145.

(131) See above under ‘The producers’.(132) See pages 1962 and 986 to 989 of the Commission’s file.(133) See Annex 5 of Cheil’s 2001 statement, page 2617 of the

Commission’s file.

(196) With regard to the same ‘P-meetings’, a third businesstrip report dated 3 to 10 October 1989 (134) explainsthat the purpose of the meeting was to ‘discuss the wayto prevent the price decline in the global market’ and tohave a ‘preliminary meeting with Takeda to discussnucleotides supply to Takeda in 1990’.

(197) Cheil’s participation in the infringement prior to 1991is also confirmed by the minutes of a meeting held on5 October 1989 between Ajinomoto, Takeda, Daesangand Cheil where target prices for 1990 had beendiscussed and where the implementation of the 1989target prices had been reviewed (135).

(198) Cheil confirms that this meeting took place even thoughit first claimed that it had found little evidence as to thecontent of that meeting (136).

(199) In its reply to the statement of objections, Cheil confirms,however, that certain meetings between competitorstook place from July 1988 and admits its participationin the infringement from March 1989, although it addsthat prior to 1992 the main focus was on markets otherthan the EEA and that, in any case, Cheil only had minoractivities on the European market between 1989 andthe end of 1991 (137).

(200) On the basis of the abovementioned evidence, theCommission considers Cheil to have participated in theinfringement from March 1989.

(201) It should of course be noted that in so far as the cartelcovered Austria, Finland, Norway and Sweden, this doesnot constitute an infringement of the EEA Agreementbefore 1 January 1994, when the Agreement came intoeffect.

(202) In its reply to the statement of objections, Ajinomotoargues that it ceased its participation in the cartel afterAugust 1996. In support thereof, Ajinomoto submitsthat it not only stopped attending producers’ meetingsafter August, but that it also ceased counterpurchasesfrom Daesang. Ajinomoto argues that the evidence inthe Commission’s file itself indicates that its withdrawalfrom the nucleotides arrangements was complete, genu-ine and permanent: there is no evidence that Ajinomotoattended any of the producers’ meetings afterAugust 1996 and contacts with Takeda were limited tounsuccessful attempts by Takeda to re-involve Ajinomo-to in the arrangements.

(134) See Annex 5 to Cheil’s 2001 statement, page 2618 of theCommission’s file.

(135) See Annexes I, J, K, L and M attached to Daesang’s supplementarysubmission; see also Daesang’s supplementary submission,page 6 and Takeda’s corporate statement, page 7.

(136) See Annex 5 to Cheil’s 2001 statement, page 2618 of theCommission’s file.

(137) See pages 5 and 6, last paragraph of Cheil’s 2001 statement,and pages 9 and 10 of its response to the Commission’sstatement of objections.


(203) Takeda, for its part, argues that the Commission shouldconsider the date of the last known meeting wheretarget prices were agreed to constitute the end of theinfringement.

(204) Daesang and Cheil do not contest the duration of theinfringement as established in this Decision.

(205) As far as Ajinomoto is concerned, the Commissionagrees that there is not sufficient evidence to demonstratethat it participated in the agreement on the target pricesfor 1997. Nevertheless, the Commission can not acceptAjinomoto’s claim that it ceased participating in theinfringement after the meeting of August 1996.

(206) As a matter of fact, the contemporaneous evidencesubmitted by Takeda concerning the bilateral meetingsit held with Ajinomoto clearly demonstrates that bothundertakings discussed the nucleotides market and pric-es during these contacts. In the notes relating to theJuly 1997 meeting, for instance, Takeda states that itwas told by Ajinomoto that they would travel to Europein August and September and suggest a 10 % priceincrease to their distributors, for which they expectedthe distributors to protest strongly. In the following noteconcerning the September meeting, Takeda states forexample that ‘[A]jinomoto’s basic policy is 15 % (mini-mum 10 %) up. In August at a meeting with Europebranches, they received strong resistance as expected,but they decided that they would start at DEM 53 andwould achieve at least DEM 51 (10 % up)’ (138). Thecombination of these two notes clearly shows thatAjinomoto had not only indicated the price increase itwould seek in Europe, but also gave feedback as to howthe discussions had gone and how they would proceedfrom there. This clearly goes beyond mere unsuccessfulattempts made by Takeda to re-involve Ajinomoto inthe arrangements (139).

(207) The Commission therefore considers that Ajinomotocontinued to take part in the infringement beyond themeeting of August 1996 by continuing to meet withTakeda and discussing nucleotides prices.

(208) Even if Ajinomoto ceased counterpurchases afterAugust 1996 and did not participate in any multilateralmeeting after August 1996, Ajinomoto continued toparticipate in the illegal scheme, actively contributing by

(138) The translation provided by Ajinomoto in its letter of 29 Novem-ber 2002 reads as follows: ‘A’s head office’s basic policy aboutDEM price is 15 % (minimum 10 %) up adjustment. Met withstrong opposition, as expected, at the meeting with Europeanbranches in August, but for the time being will start withDEM 53 and attempt to achieve minimum DEM 51 (10 % up)’

(139) In its letter of 29 November 2002, Ajinomoto confirmscontesting the facts as established in Takeda’s notes and callsinto question the probative value of the two Takeda notes asevidence for Takeda’s continued participation in the infringe-ment.

exchanging price information. Although the form mayhave changed from participating in the multilateralmeetings into holding bilateral contacts with Takeda, itmust be concluded that Ajinomoto participated in theinfringement until at least the last known meetingin which it discussed nucleotides prices, namely theSeptember 1997 meeting it held with Takeda.

(209) With regard to the other parties, given that theyparticipated in the agreement on the target prices for1997, the Commission will consider the infringementto have lasted until the end of 1997, except where anyillicit contacts between participants have been identifiedbeyond the end of 1997. In the case of Takeda andCheil, the last known meeting between them wherenucleotides prices were discussed is 2 June 1998 (140).Consequently, the Commission considers that as far asTakeda and Cheil are concerned, the infringement lasteduntil 2 June 1998.

(210) The Commission therefore considers the infringementto have lasted until September 1997 as far as Ajinomotois concerned, until the end of 1997 as far as Daesang isconcerned and until 2 June 1998 as far as Cheil andTakeda are concerned.

E. REMEDIES

1. ARTICLE 3 OF REGULATION No 17

(211) Where the Commission finds there is an infringement ofArticle 81(1) of the Treaty or 53(1) of the EEA Agree-ment it may require the undertakings concerned to bringsuch infringement to an end in accordance with Article 3of Regulation 17.

(212) In this case, the Commission indicated in its statementof objections that the participants went to considerablelengths to conceal their activities and that they had alsogiven contradictory information regarding the periodduring which the infringement took place. In their replyto the statement of objections, all undertakings submitthat they terminated their participation before theCommission initiated its investigation. Ajinomoto sub-mits that it ended its participation in August 1996.

(213) Notwithstanding these observations, and for the avoid-ance of doubt, the undertakings which remain active inthe nucleotides market and to which this Decision isaddressed should be required to bring the infringementto an end, if they have not already done so, andhenceforth to refrain from any agreement, concertedpractice or decision of an association which might havethe same or similar object or effect.

(214) The prohibition applies to all secret meetings andmultilateral or bilateral contacts between competitors inview of restricting competition between them orenabling them to concert their market behaviour, inparticular their pricing.

(140) See page 309 of the Commission’s file.


2. ARTICLE 15(2) OF REGULATION No 17

(a) GENERAL CONSIDERATIONS

(215) Pursuant to Article 15(2) of Regulation No 17, theCommission may by decision impose upon undertakingsfines from one thousand to one million euro, or a sumin excess thereof not exceeding 10 % of the turnover inthe preceding business year of each of the undertakingsparticipating in the infringement where, either intention-ally or negligently, they infringe Article 81(1) of theTreaty and/or Article 53(1) of the EEA Agreement.

(216) In fixing the amount of any fine the Commission musthave regard to all relevant circumstances and particularlythe gravity and duration of the infringement, which arethe two criteria explicitly referred to in Article 15(2) ofRegulation 17.

(217) The role played by each undertaking party to theinfringement will be assessed on an individual basis. Inparticular, the Commission will reflect in the fineimposed any aggravating or attenuating circumstancesand will apply, as appropriate, the Leniency Notice.

(218) In assessing the gravity of the infringement, the Com-mission will take account of its nature, its actual impacton the market, where this can be measured, and thesize of the relevant market. The role played by eachundertaking party to the infringement will be assessedon an individual basis.

(b) THE AMOUNT OF THE FINE

(219) The cartel constituted a deliberate infringement ofArticle 81(1) of the Treaty and Article 53(1) of theEEA Agreement: with full knowledge of the restrictivecharacter of their actions and, moreover, of theirillegality, leading producers of nucleotides combined toset up a secret and continuous system designed torestrict competition.

1. The basic amount

(220) The basic amount of the fine is determined according tothe gravity and duration of the infringement.

Gravity

(221) In its assessment of the gravity of the infringement, theCommission takes account of its nature, its actual impacton the market, where this can be measured, and the sizeof the relevant geographic market.

Nature of the infringement

(222) It follows from the facts set out above that thisinfringement consisted of market-sharing and price-fixing practices, which are by their very nature the worstkind of violations of Article 81(1) of the Treaty and53(1) of the EEA Agreement.

(223) The cartel arrangements involved major worldwideoperators and were conceived, directed and encouragedat high levels in each participating undertaking (141). Byits very nature, the implementation of a cartel agreementof the type described above leads to an importantdistortion of competition, which is of exclusive benefitto producers participating in the cartel and is detrimentalto customers and, ultimately, to the general public.

(224) The Commission therefore considers that this infringe-ment constituted by its nature a very serious infringe-ment of Article 81(1) of the Treaty and Article 53(1) ofthe EEA Agreement.

(225) Ajinomoto argues that in this case, a number of elementsshow not only that the infringement had a limitedimpact on the market, but also that the infringementwas not as serious as suggested by the Commission.These elements include the fact that the Europeannucleotide sector is of limited size, the fact that theinfringement was not fully implemented, the fact thatnucleotides represent only a very small proportion ofthe cost of the end products and that thus any harm toconsumers was limited and the fact that the ability toplay off suppliers against each other limited any harmto direct customers.

(226) The Commission must reject these arguments. It is clearthat price and market-sharing cartels by their very naturejeopardise the proper functioning of the single market.It would be erroneous to conclude on the basis of thesmall size of the market that this infringement was notvery serious. What matters is that the normal competi-tive pattern that would have governed the single marketfor nucleotides was replaced by a system of collusionconcerning the price of the product, the essentialcomponent of competition. As demonstrated in therecitals below, the arrangements were actuallyimplemented and had an actual impact on the EEAnucleotides market (142). As such, the infringement ofArticle 81(1) of the Treaty and 53(1) of the EEAAgreement is considered very serious. The Commissionconsiders the argument on the limited size of the marketin recitals 241 to 242.

(141) See recitals 57 and following.(142) The remaining elements adduced by Ajinomoto are also dealt

with under the heading ‘impact on the market’.


The actual impact of the infringement on the nucleotidesmarket in the EEA

(227) The infringement was committed by undertakingswhich, during the material period, held the lion’s shareof the world and European markets for nucleotides.Moreover, the arrangements were specifically aimed atraising prices higher than they would otherwise havebeen and restricting the quantities sold. Given that thesearrangements were implemented, they had a materialimpact on the market.

(228) There is no need to quantify in detail the extent to whichprices differed from those which might have beenapplied in the absence of these arrangements. Indeed,this cannot always be measured in a reliable manner,since a number of external factors may simultaneouslyhave affected trends in the price of the product, somaking it extremely difficult to draw conclusions on therelative importance of all possible causal effects.

(229) The cartel agreements were, however, implemented.Throughout the duration of the cartel, the partiesexchanged information on their sales prices and volumesand, on the basis of those figures, the parties agreed ontarget prices (see, for instance, recitals 80, 89, 91, 92 to94, 97 to 98, 104, 108 to 111, 115 to 116, 118 to 131,133, 135, 138 to 141). As demonstrated throughoutthe factual part of this Decision, the target prices andprice rises were agreed, announced to customers andimplemented throughout the EEA (see, for instance,recitals 86, 104, 118 to 120, 122, 124, 126, 128, 134,139 to 141, 144). The parties closely monitored theimplementation of their agreements by organising reg-ular multilateral and bilateral meetings among them. Atthese meetings, the parties exchanged their sales figures,discussed market prices (thus enabling the parties tomonitor whether the agreed target prices were beingmet) and, where necessary, agreed to adjust the targetprices (see, for instance, recitals 92, 109, 111, 124, 128to 130.

(230) In view of the above and the effort invested by eachparticipant in the complex organisation of the cartel,there is no doubt that the anti-competitive agreementwas implemented throughout the material period of theinfringement. Such continuous implementation over aperiod of nine years must have had an impact on themarket.

(231) Ajinomoto argues that the Commission bases itselfon inconclusive evidence in demonstrating that theinfringement had a significant impact on the market.According to Ajinomoto, the impact of the infringementon the market was only limited. In fact, Ajinomotosubmits that it not only proved very difficult to reachagreements on target prices, but that even where agree-ments were reached, these agreements were never fullycomplied with: deviation from the arrangements wasfrequent and not punished and no effective monitoringsystem was established. Consequently, according toAjinomoto, the infringement was not fully implemented.

(232) In addition, Ajinomoto submits that nucleotide costsaccount on average for less than 0,1 % of the price ofthe final product and the ability to play suppliers offagainst each other limited harm to direct consumers.Finally, Ajinomoto argues that an analysis of the econ-omic conditions during the period under review con-firms that price evolution was consistent with competi-tive behaviour. In support thereof, Ajinomoto hassubmitted a report prepared by RBB Economics whichstates that there is no basis for concluding that prices inthe 1988 to 1997 period were unusually stable or thatthe price drop at the end of 1998/beginning of 1999reflected the termination of the infringement. Accordingto the report, it is doubtful that any customer allocationarrangements between nucleotides manufacturers wereefficient and, secondly, the price drop at the end of1998/beginning of 1999 is the result of importantchanges in external market factors which fundamentallychanged pricing conditions in Europe rather than causedby the end of the cartel: a substantial increase in capacitycaused by the opening of Cheil’s plant in Indonesiacombined with a stagnation of demand from 1997onwards led to a high excess in capacity. Devaluation ofKorean and Indonesian currencies created additionalpressure on European prices. In a supplement to itsreply to the statement of objections, Ajinomoto submitsthat the average estimates of the capacity data providedto the Commission by the undertakings (and madeaccessible) confirm that price development throughoutthe relevant period was consistent with competitiveconditions and the infringement had a limited impacton the market.

(233) In its reply to the statement of objections, Cheil drawsthe same conclusions, emphasising that it was Cheil’sdecision to increase its capacity that caused prices to fallsignificantly at the end of 1998/beginning of 1990.Cheil also argues that the small size of the market meansthat the real economic impact of the illegal conduct issmaller, justifying setting the basic amount of the fineat a lower level. Furthermore, Cheil, supported byDaesang (143), argues that the Commission should takeinto account when determining the gravity of theinfringement the fact that the impact of the infringementon consumers is negligible as well as the fact that theKoreans were drawn into a pre-existing scheme.

(234) Similarly, Takeda submits that even the maximumpotential impact on ultimate consumers is very limitedin view of the small size of the European market,the fact that nucleotides are purchased by large foodmanufacturers rather than end consumers and in viewof the small cost factor nucleotides constitute in the endproduct. Takeda further reserves its rights as to the factthat the Commission has not sought to quantify preciselyany increase of price caused by the infringement abovethe level which would have been obtained.

(143) See both Daesang’s response of 20 September 2002 as well asthe summary sent by letter of 27 November 2002.


(235) None of the arguments used by the parties to minimisethe Commission’s finding that the cartel had an actualeffect on the market is conclusive. The explanationsconcerning the price stability between 1988 and 1997and the price drop at the end of 1998/beginning of1999 may have some validity (in particular regardingthe capacity increase caused by the opening of Cheil’snew plant in Indonesia towards the end of the cartel),but they do not demonstrate in a convincing mannerthat the implementation of the cartel agreement couldnot have played a role in the setting and fluctuation ofprices on the nucleotides market. Indeed, given that theparties had replaced the uncertain situation of freecompetition with continuous collusion, prices werenecessarily established at a level different to that whichwould have prevailed in a competitive market.

(236) The fact, highlighted by Ajinomoto and Cheil, that,towards the end of the cartel, the production capacitywas significantly increased at a time when demand wasdiminishing, leading to a drop in prices (and a reductionin the capacity utilisation rates of the respective pro-ducers), certainly illustrates the difficulties encounteredby the parties towards the end of the cartel to influenceprices in a difficult market situation, and perhaps eventhe reasons for the collapse of the cartel itself. It doesnot, however, demonstrate that the illegal practice hadno effect on the market during the nine-year existenceof the cartel, nor does it demonstrate that prices werenot kept above a competitive level.

(237) On the contrary, when examining the combined effortsof the cartel members (see recitals 75 to 149, it canreasonably be concluded that during the entire period ofthe cartel, the cartel members managed to maintainprices at a level higher than they would have beenwithout the illicit arrangements.

(238) Even if the results sought by the cartel participants werenot entirely achieved, this would not prove that thecartel did not affect the market. Moreover, it is inconceiv-able, given, inter alia, the risks involved, that the partieswould repeatedly have agreed to meet in locations acrossthe world to set target prices over the period of theinfringement, if they had perceived the cartel as havinglittle or no impact on the nucleotides market. In thisrespect, one can as an example make reference to thespecific congratulations expressed by Ajinomoto to allcartel members during one of the cartel meetings for thesuccessful implementation of the 1995 target prices(see recital 126 or Annex Z attached to Daesang’ssupplementary submission (144)).

(144) See page 1076 of the Commission’s file.

(239) In their replies to the statement of objections, Ajinomo-to, Cheil and Daesang have also argued that the Com-mission’s own evidence shows that they have oftendisregarded the arrangements and often acted auton-omously on the market. This argument cannot, however,be followed. Not only does the Commission have ampleevidence showing that Ajinomoto, Daesang and Cheilactually continued to take part in the infringementthroughout the entire duration of the infringement(which is also not contested by the parties, except forAjinomoto as far as its participation beyondAugust 1996 is concerned), but the fact that any of theparties may well have had ‘hidden agendas’ causing themto disregard to some extent the commitments madetowards the other cartel participants does not imply thatthey did not implement the cartel agreement. As theCourt of First Instance held in Cascades v Commission, ‘anundertaking which, despite colluding with its competi-tors follows a more or less independent policy on themarket may simply be trying to exploit the cartel for itsown benefit’ (145).

The size of the relevant geographic market

(240) The cartel covered the whole of the common marketand, following its creation, the whole of the EEA. Everypart of the common market and the EEA was underthe influence of the collusion. For the purposes ofdetermining gravity, the Commission therefore considersthe entirety of the Community and, following its cre-ation, the EEA to have been affected by the cartel.

Conclusion of the Commission on the gravity of the infringe-ment

(241) Taking into account the nature of the behaviour underscrutiny, its actual impact on the nucleotides market andthe fact that it covered the whole of the Commonmarket and, following its creation, the whole EEA, theCommission considers that the undertakings concernedby this Decision have committed a very serious infringe-ment of Article 81(1) of the Treaty and 53(1) of the EEAAgreement.

(242) A clear distinction must be made between the questionof the size of the product market and that of the actualimpact of the infringement on this product market. It isnot the practice of the Commission to consider the sizeof the product market as a relevant factor to assessgravity.

(243) Nevertheless, without prejudice to the very seriousnature of an infringement, the Commission will in thiscase take into consideration the limited size of theproduct market.

(145) Case T-308/94 Cascades v Commission [1998] ECR II-925,paragraph 230.


Classification of cartel participants

(244) Within the category of very serious infringements, theproposed scale of likely fines makes it possible to applydifferential treatment to undertakings in order to takeaccount of the effective economic capacity of theoffenders to cause significant damage to competitionand to set the fine at a level which ensures it has sufficientdeterrent effect. This seems particularly necessary where,as in this case, there is considerable disparity in themarket share of the undertakings participating in theinfringement.

(245) In the circumstances of this case, which involves severalundertakings, it will be necessary, when setting the basicamount of the fines, to take account of the specificweight, and therefore the real impact on competition, ofeach undertaking’s offending conduct.

(246) For this purpose the undertakings concerned can bedivided into different categories according to theirrelative importance in the market concerned, subject toadjustment where appropriate to take account of otherfactors, such as in particular, the need to ensure effectivedeterrence.

(247) As a basis for comparison of the relative importanceof the undertakings in the market concerned, theCommission considers it appropriate in this case to taketheir respective shares of the world market for theproduct. Given the global character of the market,these figures provide the most suitable picture of theparticipating undertakings’ capacity to cause significantdamage to other operators in the common market and/or the EEA. Moreover, the world market share of anygiven party to the cartel also gives an indication of itscontribution to the effectiveness of the cartel as a wholeor, conversely, of the instability which would haveaffected the cartel had it not participated. The compari-son is based on shares of the world market for theproduct in the last full calendar year of the infringement(1997).

(248) Ajinomoto was at all times the largest producer ofnucleotides in the relevant geographic market. In 1997its estimated share of the world market was between40 % and 50 %.

(249) Takeda, Cheil and Daesang were smaller players on theworld nucleotides market. In 1997 their respectiveestimated market share was between 10 % and 20 %,more than two times’ smaller than that of Ajinomoto,the largest player.

(250) Ajinomoto will therefore constitute a first category.Takeda, Cheil and Daesang will constitute a secondcategory.

(251) On the basis of the above, the basic amounts of the finesdetermined for gravity should be as follows:

— Ajinomoto: EUR 6 million,

— Takeda, Daesang and Cheil: EUR 2,4 million.

Sufficient deterrence

(252) In order to ensure that the fine has a sufficient deterrenteffect and takes account of the fact that large undertak-ings have legal and economic knowledge and infrastruc-tures which enable them more easily to recognise thattheir conduct constitutes an infringement and be awareof the consequences stemming from it under compe-tition law, the Commission will further determinewhether any further adjustment of the basic amount isneeded for any undertaking.

(253) With respective worldwide turnovers of EUR 8,7 billionand EUR 9,2 billion in 2001, Ajinomoto and Takeda aremuch larger players than Daesang (worldwide turnoverof EUR 1,4 billion (2001)) and Cheil (worldwide turn-over of EUR 1,9 billion in 2001). In this respect, theCommission considers that the appropriate startingpoint for the fines based on the criterion of the relativeimportance in the market concerned requires furtherupward adjustment to take account of the size and theoverall resources of Ajinomoto and Takeda respectively.

(254) On the basis of the above, the Commission considersthat the need for deterrence requires the starting pointfor the fines determined in recital 251 to be increasedby 100 % to EUR 12 million as regards Ajinomoto andby 100 % to EUR 4,8 million as regards Takeda.

Duration of the infringement

(255) The Commission considers that Daesang has infringedArticle 81(1) of the Treaty from 19 December 1988until the end of 1997 and Article 53(1) of the EEAAgreement from 1 January 1994 until the end of 1997.

(256) The Commission considers that Cheil has infringedArticle 81(1) of the Treaty from March 1989 until 2 June1998 and Article 53(1) of the EEA Agreement from1 January 1994 until 2 June 1998.

(257) Takeda submitted that the Commission should take thedate of the last known cartel meeting as the final datefor the infringement. As demonstrated above under‘Duration’, the evidence in the file shows that 2 June1998 was, in fact, the last known illicit contact betweenTakeda and a cartel member. Consequently, the Com-mission considers that Takeda infringed Article 81(1) ofthe Treaty from 8 November 1988 until 2 June 1998and Article 53(1) of the EEA Agreement from 1 January1994 until 2 June 1998.


(258) Lastly, Ajinomoto contests the duration of the infringe-ment, only admitting its participation in the infringe-ment until August 1996. The duration of Ajinomoto’sparticipation in the cartel is discussed in recitals 202 to210). The Commission considers that Ajinomoto hasinfringed Article 81(1) of the Treaty from 8 November1988 until at least September 1997 and Article 53(1) ofthe EEA Agreement from 1 January 1994 until at leastSeptember 1997.

(259) The Commission therefore concludes that Takeda, Aji-nomoto, Daesang and Cheil have committed theinfringement for respectively nine years and six months(Takeda), eight years and nine months (Ajinomoto), nineyears (Daesang) and nine years and two months (Cheil),which corresponds to a long duration (more than fiveyears). The starting amounts of the fines determined forgravity (see recitals 251 and 254) are therefore increasedby 10 % per year and 5 % per six months, i.e. by 95 %as far as Takeda is concerned, 90 % as far as Cheil andDaesang are concerned and 85 % as far as Ajinomoto isconcerned.

(260) Cheil submits however in its reply to the statement ofobjections that, although the Guidelines on the methodof setting fines imposed pursuant to Article 15(2) ofRegulation No 17 and Article 65(5) of the ECSCTreaty (146) indicate that an infringement of ‘long dur-ation’ may merit an increase of 10 % per annum, thisdoes not mean that every infringement should be subjectto such a ‘per year’ increase. In particular, Cheil submitsthat the Commission should consider applying a lowerincrease on account of duration than the standard 10 %per year for the period from March 1989 to the start of1992 in the light of the small participation of Cheil inthe infringement during that period (and the resultingsmall impact on the market). Similarly, Cheil submitsthat regarding the post-1996 events, such an approachwould be equally justified in view of the fact that theintensity of these events was much lower and in view ofCheil’s 1996 decision to increase capacity (effectivetowards the end of the 1990s).

(261) The Commission must reject this argument. Cheil’sparticipation in the infringement during the entireduration of the infringement has been established in thefactual part of this Decision. It is also established thatthe infringement had an impact on the EEA market. Themere fact that a participant in a cartel may play the rolewhich is appropriate to its own specific circumstancesdoes not exclude its responsibility for the infringementas a whole. An undertaking which takes part in thecommon unlawful enterprise by actions which con-tribute to the realisation of the shared objective is equallyresponsible, for the whole period of its adherence to thecommon scheme, for the acts of the other participantspursuant to the same objective (147). The Commissiontherefore considers that Cheil participated in theinfringement in the same manner throughout the entireduration of the infringement.

(146) OJ C 9, 14.1.1998, p. 3.(147) Judgment of the Court of Justice in Commission v Anic, para-

graph 83.

Conclusion on the basic amounts

(262) The basic amounts of the fines should therefore be asfollows:

— Takeda: EUR 9 360 000,

— Ajinomoto: EUR 22 200 000,

— Daesang: EUR 4 560 000,

— Cheil: EUR 4 560 000.

2. Aggravating circumstances

(263) The Commission has not identified any aggravatingcircumstances to be taken into account in this Decision.

3. Attenuating circumstances

Exclusively passive role in the infringement

(264) Cheil and Daesang state in their reply (148) that theyalways played a passive or ‘follow-my-leader’ role in theinfringement. They were drawn into a pre-existing cartelwhich was lead by Takeda and, to a minor extent,Ajinomoto who wished to protect their own markets andlimit competition through counterpurchases. Ajinomotostates in this respect that it played a subordinate role toTakeda, who should be considered as the real leader ofthe cartel. Moreover, the Korean producers argue thatthey are much smaller than their Japanese counterparts,which also demonstrates the limited impact of theirbehaviour on the market.

(265) The effective economic capacity of the undertakings toinfluence the EEA market on the basis of their economicsize has been taken into account in the calculation ofthe basic amount of the fine (see recitals 244 to 251).

(266) Even if, on the basis of these statements, there might becertain elements indicating that the Japanese undertak-ings started the cartel and took the initiative to organisecertain meetings, the Commission has no reason toconsider that either of the Korean producers played apurely passive role or ‘follow-my-leader role’ in theinfringement. Both undertakings participated in the vastmajority of the cartel meetings identified and took partdirectly and actively in the infringement. Indeed, Cheiland Daesang took part in the meetings and exchangedsales information throughout their participation. Theycannot therefore claim to have played a purely ‘passiverole’ (149).

(148) See also Daesang’s summary statement of 27 November 2002.(149) See, for instance, paragraph 365 of Commission Decision 2001/

418/EC in Case COMP/36.545/F3 Amino Acids (OJ L 152,7.6.2001, p. 24).


(267) For example, Daesang’s own report of the meeting thattook place in December 1995 in review of the 1995cooperation (150) shows clearly that all parties hadcooperated in implementing the 1995 price increasesand all parties agreed to continue the cooperation for1996. As shown by the facts, Cheil and Daesang wouldin turn also make proposals on target prices and holdmeetings among them to prepare a common positionfor the producers meetings.

(268) In view of the totality of the evidence in this case, asdescribed under the factual part of this Decision, thepicture is that of a cartel in which all parties participatedactively and directly in the infringement, exchangingtheir sales figures and reviewing and discussing thetarget prices. All participants held a shared interest in thearrangements. All cartel members have been identified asparticipating in most of the cartel meetings and takingturns organising the meetings concerned. As such, thereis also no undertaking which can be considered as aleader in the sense of the Guidelines.

Non-implementation in practice of the offendingagreements

(269) As discussed in recital 229, the Commission considersthat the anti-competitive agreements were implemented.This attenuating circumstance is not therefore applicableto any of the addressees of this Decision. The Com-mission notes that in principle, an agreement restrictingcompetition is implemented where the cartel membersdetermine their conduct on the market according thejoint intentions expressed. In case of repeated agree-ments, concluded over a long period, it can be presumedthat the agreements have been implemented by each ofthe participants as they would otherwise not haverepeatedly agreed to meet in locations worldwide to fixprices and allocate customers over such a long period oftime. None of the arguments put forward by theparties, can validly overthrow the proof adduced by theCommission.

(270) As already stated in recital 239, an undertaking whichdespite colluding with its competitors follows a more orless independent policy on the market may simply betrying to exploit the cartel for its own benefit (151). Thefact, as is claimed by the parties, that they regularly didnot comply with the agreed arrangements, can thereforenot be regarded as sufficient evidence demonstrating thenon-implementation of the agreements.

(150) See Annex Z attached to Daesang’s supplementary submission,page 1076 of the Commission’s file.

(151) Case T-308/94 Cascades SA v Commission, paragraph 230.

Other attenuating circumstances

(271) In its reply to the statement of objections, Ajinomotosubmits that the Commission should regard its unilateraland voluntary termination of its participation, in particu-lar prior to any Commission intervention, in the infringe-ment as a mitigating circumstance as well as the factthat this unilateral withdrawal would have contributedto the unravelling of the infringement.

(272) In support thereof, Ajinomoto refers to Takeda’s internalmemoranda of 28 May 1997 and 9 June 1997 (152), andTakeda’s corporate statement (153), where reference ismade to the concerns of the cartel members with regardto Ajinomoto’s decision no longer to participate in themultilateral meetings after August 1996 and the effectsthis would have on these meetings.

(273) This argument must be rejected. It has been demon-strated under ‘Duration’ that Ajinomoto’s decision nolonger to participate in the multilateral meetings afterAugust 1996 can not be considered as demonstratingits unilateral termination of its participation in theinfringement as from that date. On the contrary, theCommission considers that it continued to participate inthe infringement by maintaining bilateral contacts withTakeda, discussing the nucleotides market and prices. Inthese circumstances, the Commission considers thatAjinomoto’s lack of participation in the multilateralmeetings can only have played a minor role, if indeedany at all, in the ‘unravelling’ of the cartel.

(274) Cheil submits that the Commission should take intoaccount the fact that it has already been fined for thisinfringement in the USA, claiming that undertakingsshould not be exposed to ‘double jeopardy’ and that theCommission should solely base the level of the fine onthe effects that the infringement had in the relativelysmall Community market.

(275) This argument should be rejected. Fines imposed inother jurisdictions, including the USA, do not have anybearing on the fines to be imposed for infringingCommunity competition rules. The exercise by theUnited States (or any other third country) of its jurisdic-tion over cartel behaviour can in no way limit or excludethe Commission’s jurisdiction under Community com-petition law. It is noted that by virtue of the principle ofterritoriality, Article 81 of the Treaty is limited torestrictions of competition in the common market andArticle 53 of the EEA Agreement is limited to restrictionsof competition in the EEA market. In the same way, theUS antitrust authorities only exercise jurisdiction to theextent that the conduct has a direct and intended effecton the United States.

(152) Respectively, pages 2147 and 2151 of the Commission’s file.(153) Takeda’s statement, page 2173 of the Commission’s file.


(276) Takeda submits that the Commission should take intoaccount the fact that it already paid a substantial fine inthe Vitamins case (154). Ajinomoto puts forward a similarargument in relation to the fine it paid in the Lysinecase (155). The Commission rejects that argument. TheVitamins case and the Lysine case did not deal withTakeda’s and Ajinomoto’s infringement on the nucleo-tides market and can therefore not be taken into accountfor the purpose of this Decision.

(277) Cheil and Daesang further submit that they regularly didnot comply with the arrangements and even actedagainst them, such as by increasing production capacityor undercutting the target prices.

(278) The Commission stresses once again that the factthat an undertaking which has been proved to haveparticipated in collusion on prices with its competitorsdid not behave at all times on the market in the manneragreed with its competitors is not necessarily a matterwhich must be taken into account as an attenuatingcircumstance when determining the amount of the fineto be imposed. As stated earlier, an undertaking whichdespite colluding with its competitors follows a more orless independent policy on the market may simply betrying to exploit the cartel for its own benefit (156).

(279) Ajinomoto, Cheil and Takeda also point out that theyhave taken measures to prevent any future infringementof anti-trust rules. In this context, they have adopted orstrengthened compliance programmes. The Commissionwelcomes the fact that these undertakings have set upan anti-trust law compliance policy. It neverthelessconsiders that this initiative came too late and cannot, asan instrument of prevention, dispense the Commissionfrom its duty to penalise an infringement of the compe-tition rules committed by these undertakings in the past.In the light of the above, the adoption of a complianceprogramme should not be considered as an attenuatingcircumstance justifying a reduction in the fine.

(280) There are therefore no attenuating circumstances appli-cable to the participants in this infringement affectingthe nucleotides market.

4. Application of the leniency notice

(281) The addressees of this Decision have cooperated withthe Commission at different stages of the investigationinto the infringement for the purpose of obtaining thefavourable treatment set out in the Leniency Notice.In order to meet the legitimate expectations of the

(154) Case 37.512, not published yet.(155) Case 36.545 (OJ L 152 7.6.2001, p. 24-72).(156) Case T-308/94 Cascades SA v Commission, paragraph 230.

undertakings concerned as to the non-imposition orreduction of the fines on the basis of their cooperation,the Commission examines in the following sectionwhether the parties concerned satisfied the conditionsset out in the Leniency Notice.

Non-imposition of a fine or a very substantialreduction of its amount (Section B)

(282) Takeda has requested the benefit of maximum leniency.In this respect, Takeda claims that it should benefitfrom changes in the leniency policy introduced bythe Commission Notice on immunity from fines andreduction of fines in cartel cases (157) published in 2002(the 2002 Leniency Notice), arguing that it did not takeany steps to coerce any other undertaking to participatein the infringement. Consequently, Takeda submits thatit could qualify for maximum leniency under the newrules. Takeda argues that Community law recognises theprinciple that in certain circumstances, retroactive effectshould be given to changes in the treatment of penaltieshaving a deterrent effect, and that principle can applymore generally in relation to administrative decisions, asis applied in a number of Member States.

(283) The 2002 Leniency Notice clearly states that it is notapplicable to cases in which undertakings have alreadycontacted the Commission to take advantage of thefavourable treatment set out in the previous notice.Consequently, all leniency applications should be treatedin the light of the provisions of the Leniency Noticepublished in 1996, which remains applicable for thepurpose of this Decision.

(284) The Commission acknowledges that Takeda was the firstto come forward adducing decisive evidence of theexistence of the cartel and maintaining continuingand complete cooperation throughout the investigation.Takeda first informed the Commission of the existenceof the cartel on 9 September 1999, handing over a filewith contemporaneous evidence on 14 September 1999.At that time, the Commission had not received anyinformation of the cartel from any other source.

(285) In assessing Takeda’s cooperation, the Commissionnotes that the documentary evidence it first produceddid not relate to the activities of the cartel prior to1992. Nevertheless, in its corporate statement, Takedaindicated that the cartel did in fact originate in 1989.There is no indication that Takeda has any otherinformation or documents available concerning thecartel. Therefore, it must be concluded that Takeda’scooperation with the Commission has been complete.

(157) OJ C 45, 19.2.2002, p. 3.


(286) Despite there being elements in the file indicatingthat Takeda may have played, on certain occasions, acoordinating role in the cartel, Takeda did not compelany other enterprise to take part in the cartel and didnot act as an instigator in the cartel nor did it play adetermining role in the illegal activity in the sense of theLeniency Notice. It has also been established that Takedahad put an end to its involvement in the infringementbefore coming forward to the Commission.

(287) In the light of its overall cooperation in the investigation,Takeda fulfils the conditions set out in Section B of theLeniency Notice and should be granted a 100 %reduction in the fine that would have been imposed hadit not cooperated with the Commission.

Substantial reduction in a fine (Section C)

(288) Daesang, Cheil and Ajinomoto request the benefit of areduction in fine in accordance with Section C of theLeniency Notice. At the time when Daesang, Cheil andAjinomoto started to cooperate with the Commission,Takeda had already submitted sufficient information toestablish the existence of the cartel. Consequently, it isconcluded that Daesang, Cheil and Ajinomoto were notthe first to provide the Commission with decisiveevidence on the existence of the nucleotides cartel, asrequired under point (b) of Section B of the LeniencyNotice. Accordingly, none of those undertakings meetsthe conditions as set out in Section C.

Significant reduction of a fine (Section D)

(289) Daesang submits that it not only offered to cooperatewith the Commission’s investigation before the Com-mission issued the first request for information butalso provided the Commission with its complete andcontinuous cooperation throughout the investigation. Italso argues that it has enabled the Commission toestablish the entire duration of the infringement as fromOctober 1988 and was thus the first to adduce decisiveevidence of the entire infringement set out in thestatement of objections.

(290) Although Daesang only contacted the Commissionafter Takeda had already come forward, it neverthelesscontacted the Commission on its own initiative prior toreceiving any request for information. In addition,Daesang fully cooperated with the Commission’s investi-gation throughout the entire investigation. Daesang alsoprovided information that contributed materially toestablishing the facts relating to the existence of thecartel arrangements prior to 1992.

(291) The information provided by Daesang, prior to theCommission sending it a request for information, wasdetailed and extensively used by the Commission inthe pursuit of its investigation. In particular, but notexclusively, Daesang provided valuable information onthe operation of the cartel prior to 1992. After receiving

the statement of objections, Daesang did not substan-tially contest the facts on which the Commission basesits findings. Daesang therefore fulfils the conditions setout in the first and second indent of paragraph 2 ofSection D of the Leniency Notice and should conse-quently be granted a reduction of the fine of 50 %.

(292) Cheil provided many contemporaneous reports of meet-ings and contacts thus materially contributing to estab-lishing the existence of the cartel. The informationprovided by Cheil was extensively used by the Com-mission. Furthermore, Cheil does not contest the factsof the infringement as set out by in the statement ofobjections. It must therefore be concluded that Cheilfulfils the conditions as set out in the first and secondindent of paragraph 2 of Section D of the LeniencyNotice, as argued by Cheil. Consequently, in view of theoverall cooperation provided by Cheil to the Com-mission’s investigation, it should be granted a 40 %reduction in the fine that would have been imposed hadit not cooperated with the Commission.

(293) Ajinomoto has fully cooperated with the Commissionduring the entire duration of the investigation, assistingthe Commission in materially establishing the existenceof the infringement, providing contemporaneous docu-ments which were extensively used by the Commissionas well as clarifications given on the operation ofthe arrangements. Consequently, Ajinomoto fulfils theconditions laid down under the first indent of para-graph 2 of Section D of the Leniency Notice.

(294) However, Ajinomoto contests the facts as set out in thestatement of objections as far as the duration of thecartel is concerned. Ajinomoto therefore does not qualifyfor a reduction of the fine pursuant to the second indentof paragraph 2 of Section D of the Leniency Notice. Onthe basis of the foregoing, it is concluded that Ajinomotofulfils the conditions set out in the first indent ofparagraph 2 of Section D of the Leniency Notice andshould accordingly be granted a reduction of 30 %.

Conclusion on the application of the LeniencyNotice

(295) In conclusion, with regard to the nature of theircooperation and in the light of the Leniency Notice, theaddressees of this Decision should be granted thefollowing reductions of their respective fines:

— to Takeda: a reduction of 100 %,

— to Ajinomoto: a reduction of 30 %,

— to Daesang: a reduction of 50 %,

— to Cheil: a reduction of 40 %.


5. The final amounts of the fines imposed in theseproceedings

(296) In conclusion, the fines to be imposed, pursuant toArticle 15(2)(a) of Regulation No 17, should be asfollows:

— Takeda: EUR 0,

— Ajinomoto: EUR 15 540 000,

— Daesang: EUR 2 280 000,

— Cheil: EUR 2 736 000,

HAS ADOPTED THIS DECISION:

Article 1

Ajinomoto Company Incorporated, Takeda Chemical Indus-tries Limited, Daesang Corporation and Cheil Jedang Corpor-ation have infringed Article 81(1) of the Treaty andArticle 53(1) of the EEA Agreement by participating, in themanner and to the extent set out in the reasoning, in a complexof agreements and concerted practices in the nucleotidessector.

The duration of the infringement was as follows:

(a) Ajinomoto Company Incorporated, from 8 November1988 until September 1997;

(b) Takeda Chemical Industries Limited, from 8 November1988 until June 1998;

(c) Daesang Corporation, from 19 December 1988 until theend of 1997;

(d) Cheil Jedang Corporation, from March 1989 untilJune 1998.

Article 2

The undertakings listed in Article 1 shall immediately bring toan end the infringement referred to therein, in so far as theyhave not already done so.

They shall refrain from any agreements or concerted practicesin relation to their activities in nucleotides that may have thesame or similar object or effect as the infringement.

Article 3

The following fines are hereby imposed on the undertakingslisted in Article 1 in respect of the infringement referred totherein:

— Ajinomoto Company Incorporated, a fine ofEUR 15 540 000,

— Daesang Corporation, a fine of EUR 2 280 000,

— Cheil Jedang Corporation, a fine of EUR 2 736 000.

The fines shall be paid within three months of the date of thenotification of this Decision to the following account of theEuropean Commission:

Account No 642-0029000-95IBAN code: BE76 6420 0290 0095SWIFT code: BBVABEBBBanco Bilbao Vizcaya Argentaria (BBVA) SAAvenue des Arts/Kunstlaan, 43B-1040 Bruxelles/Brussel

After expiry of that period, interests shall automatically bepayable at the interest rate applied by the European CentralBank to its main refinancing operations on the first day of themonth in which this Decision is adopted, plus 3,5 percentagepoints, namely 6,75 %.

Article 4

This Decision is addressed to:

Takeda Chemical Industries Limited12-10, Nihonbashi 2-chomeChuo-kuTokyo 103-8668Japan

Ajinomoto Company Incorporated15-1, Kyobashi itchomeChuo-kuTokyo 104-8315Japan

Cheil Jedang Corporation6F, Cheiljedang BldgNamdaemoon-RoChung-Ku, 100-095 SeoulKorea

Daesang CorporationDaesang Building96-48 Shinsul-DongDongdaemoon-Ku, SeoulKorea

This Decision shall be enforceable pursuant to Article 256 ofthe Treaty.

Done at Brussels, 17 December 2002.

For the Commission

Mario MONTI

Member of the Commission

Documents

COMMISSION - Duke's Fuqua School of Businessmarx/bio/AntitrustDecisions/Food... · L 75/4 EN Official Journal of the European Union 12.3.2004 (10) Its European affiliates are Ajinomoto